MAR 6815 MARKETING MANAGEMENT

1. MAR 6815MARKETING MANAGEMENT HUDSON ROGERS FLORIDA GULF COAST UNIV.

2. Value of Marketing • Form Utility – Physical Product (a production function with help from marketing) • Task Utility – Service Performance • Time Utility – available when needed • Place Utility – Available where needed • Possession Utility – right to consume • Accounts for about 50% of goods sold • Affects every aspect of life in developed countries • Firm’s interface with the public • Brings resources to the firm • Applies to all organizations!

3. Core Concepts of Marketing • Need – basic human requirement. Marketing cannot create needs • Want – need directed at a specific object • Demand – want backed by willingness and ability to pay • Market – collection of potential buyers (customers) with similar needs who are willing and able to exchange something of value with sellers (industry) of a given product

4. Stages of Economic Development • Marketing occurs only where society developed beyond the self-supporting stage. • Pre- Industrial • Primary Manufacturing • Consumer Markets (Non-durable & Semi-Durable) • Capital Equipment and Durables • Exporting Manufactured Products • Services • As economies change and advance so does marketing

5. Evolution of Marketing • Production Era • Product Concept • Selling Concept • Marketing Concept • Societal Marketing Concept

6. Controllable and Uncontrollable Elements of Marketing • Controllable Elements – those that are under the direct influence (control) of the marketer • 4 P’s (Product, Price, Place, Promotion) • The 4 Ps also called the Marketing Mix – it’s really a mix of 4 separate mixes (Product Mix, Price Mix, Place Mix, Promotion Mix)

7. Uncontrollable Elements • Uncontrollable Elements are those things that are not directly under the control of the marketer. • What are the uncontrollable elements that marketers face? • Marketers must cope with the seven Social Institutions - P.E.L.F.R.E.C • These change and affect the way in which the 4 P’s can be used.

8. Seven Social Institutions • Political – means of determining power • Economic – means of gathering and sharing resources • Legal – method by which laws/rules are passed and implemented • Family – unity of procreation • Religious – system of beliefs adhered to in the society • Education – Means whereby the knowledge and values passed on from generation to generation • Culture – way of life of a people. Involves both concrete and abstract elements.

9. Marketing and the New Economy • Marketing constantly changes in response to changes in the environment • Recent changes involve • Deregulation • Digital Communication • These changes give rise to new forms of businesses and products • Cell phones • E-Commerce/E-Business • Hybrid Brick & Mortar + Point and Click

10. Marketing Paradigm • Old Paradigm – Mass Marketing • New Paradigm – One-to-One or Customized Marketing (read McKenna – “Marketing is Everything”)

11. Building Customer Satisfaction , Value & Retention • What is Value? • Value – benefit derived from a product • Value - from customer’s perspective it is the difference between benefits and costs (+ive/-ive) • View two types of value: • Value in use – benefits from consumption • Value in Exchange – giving product to get something in return • Is there a difference between the two?

12. Satisfaction • Satisfaction – what is it? • Satisfaction – feeling of pleasure or disappointment derived from using a product and having it perform (not perform) as expected • What are the factors involved in satisfaction?

13. Satisfaction (Continued) • Perceived Expectation – benefits expected based upon information and perceptions. • Performance • Performance >/= Expectations – satisfaction • Performance </= Expectations - dissatisfaction • Firms do not seek to maximize satisfaction – it would be too expensive • How much satisfaction should the firm provide? – As much as you are willing to pay for.

14. Measuring Satisfaction • Ask the customer (when should you ask the customer – before or after product usage)? How should you reconcile the two. • Ask before to get expectations data • Ask after usage to get at performance data • Derive performance by viewing the difference between performance and expectations. • You can also use a global measure by asking – “How satisfied are you with the product?” However this measure not thought to be very reliable.

15. Value Chain • Firms are really customer satisfying entities – Value Chair (Porter 1985) • Nine Value Creating Activities: • 1. Inbound Logistics -- [First 5 are Primary Activities] • 2. Operations • 3.Outbound Logistics • 4. Marketing and Sales • 5. Service • 6. Procurement -- [Next four are support Activities] • 7. Technology Development • 8. Human Resource Management • 9. Infrastructure of the Firm

16. Value Chain (Cont’d) • Success depends upon how well the firm does these activities. Porter suggest focusing on CORE BUSINESS PROCESSES: • New Product Development • Inventory Management • Getting and Keeping Customers • Customer Service, • Marketing Activities.

17. Getting and Keeping Customers • Which activity is easier? Why? • Which is more expensive? Why? • What is the cost of a lost customer? • Annual sales per customer ($6,000) • Average number of years (5 yrs) • Profit Margin (.10) • Customer lifetime value to the firm ($3,000) compared with the cost of getting a new customer.

18. Total Quality Management • TQM requires continuous improvement of the firm’s processes, products, and services. • New products always introduced to satisfy customer current needs --- market what customers want not what the firm has to sell. • TQM – key to value creation and customer satisfaction and is an essential element of marketing. McKenna notes that within the firm every thing we do creates a perception of the firm and its ability to satisfy the customer --- hence he asserts that marketing is everyone’s business.