Some Thoughts About Marketing

1. Some Thoughts About Marketing • PLATO - The Law: Characterizes a city of merchants and shopkeepers as: “...unfriendly and unfaithful to her own citizens and other nations.”

2. Some Thoughts About Marketing • ARISTOTLE: Ranked the economic pursuits, with agriculture and handicrafts being considered more worthy than involvement in exchange, and classified retail trade as: “... justly censored, because the gain which results is not naturally made but is made at the expense of other men.”

3. Some Thoughts About Marketing • CICERO: Describes merchants as those who are: “...to be accounted vulgar: for they can make no profit except by a certain amount of falsehood.”

4. Some Thoughts About Marketing • VELBEN: “Advertising is absentee salesmanship, and is a meretricious endeavor in which psychological appeals to “fear” and “shame” are developed to bamboozle the public into purchasing essentially worthless package goods at bloated prices.”

5. Some Thoughts About Marketing • HERMAN WOUK - Aurora Dawn “A shoemaker gives shoes for his bread...But what does an advertising man do? He induces human beings to want things they don’t want...Advertising blasts everything that is good and beautiful in this land with a horrid spreading mildew. It has tarnished creation... To what end is all this lying, vandalism, and misuse? You are trying to Sell: never mind what, never mind how, never mind to whom, just Sell, Sell, Sell! Small wonder that in good, old American slang ‘sell’ means ‘fraud’.”

7. Definitions of Marketing • Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer or user. • American Marketing Association, 1960 • Marketing is the process in a society by which the demand structure for economic goods and services is anticipated or enlarged and satisfied through the conception, promotion, exchange, and physical distribution of such goods and services. • Ohio State Marketing Faculty, 1965

8. Definitions of Marketing • Marketing is the set of human activities directed at facilitating and consummating exchanges. • Kotler, 1971 • Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. • American Marketing Association, 1985

9. Definitions of Marketing • Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others. • Kotler, 1997

10. Industrial Revolution Company Orientations Toward The Marketplace Production Orientation Description: Transition from home manufacturing to factories Managerial Objective: Profit maximization through generation of economies of scale Description: Focus on product development, performance and feature; growth of large-scale industrial empires Managerial Objective: Profit maximization through superior product performance Description: Transition from scarcity of goods to scarcity of markets; market saturation with basics Managerial Objective: Profit maximization via generation of demand for products Description: Transition from internal (organization) to external (customer)basis for guiding marketing decisions Managerial Objective: Profit maximization via matching of organization’s products to customer’s wants Product & Financial Orientation Sales Orientation Marketing Orientation

11. Marketing Orientation Emergence and Evolution • Emerges out of competitve necessity • Begins with greater focus on customers and recognition of customer segments by people in marketing positions • Evolves to customer focus throughout the organization, provided that the incentive structure is focused on building long-term customer relationships • Requires retrospective, as well as prospective, customer research

12. Overview of the Marketing Process • Marketing Orientation • Focus onCustomer Needs • Use an Integrated Marketing Program • Achieve Profits and Satisfy Organizational Goals through Customer Satisfaction/Relationship Building

13. Marketing Concept Sales Concept Focus Products Means Selling and Promotions End Profits through Sales Volume Focus Customer Needs Means Integrated Marketing End Profits through Customer Satisfaction Marketing Concept

14. Marketplace Dynamics in the 1990’s CHANGES • Manufacturers • Excess supply & barriers to exit • Price hikes Profits ‘80’s • Internal demands & focus • Marketing activities vs. Marketing orientation • Channel Members • Consolidation of traditional players • More sophisticated management • Control of customer information • Emergence of new formats • Customers • Slowing growth • Better educated • Increased demands on time & money • Less homogeneous • Traditional media viewing down

15. Marketplace Dynamics in the 1990’s CONSEQUENCES Increases In: Trade promotion Private label Customer price focus Decreases In: Advertising Manufacturers’ brand equity Profits & market value

16. Company/Brand Equity • What is a brand? “A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand is timeless.” Stephen King, WPP Group, London • What is Equity? Equity is the result of customers’ or consumers’ mental associations to a company or brand. These association may either add to or subtract from the value provided by a company’s products and services.

17. Overview of the Marketing Process • Key Steps in Developing a Marketing Strategy Opportunity analysis Segmentation Marketing Research Targeting Positioning Market Mix Decisions

18. Overview of Marketing Process • Opportunity Analysis Firm Capabilities Consumer Analysis Competitor Analysis Market Opportunity Identification

19. Overview of the Marketing Process • Segmentation • Assess Market Heterogeneity • If Heterogeneous, Describe Important Segments in Terms of : • Usage • Demographics • Benefits Sought • Psychographics • Decision Processes • Be Sure Resulting Segments Meet Criteria for Segmentation

20. Overview of the Marketing Process • Targeting • Conduct Segment-Specific Opportunity Identification • Select Target(s) Whose Needs Can Be Better Met by Your Firm than by Competitors (i.e., Target for which you have a Differential Advantage) • Targeting Principles • Path of Least Resistance • Current Customers-Loyalty + Expanded Usage (Primary Demand) • Neglected Category Users - Awareness (Selective Demand) • Competitors’ Customers - Switching (Selective Demand) • Nonusers - Category Build (Primary Demand) • Target Expanding Markets

21. Overview of the Marketing Process • Positioning/Benefit Selection • Price vs. Quality • Features vs. Psychic Benefits • Prepare a Positioning Statement to Summarize the Targeting and Position • Positioning Must Evolve as the Market Changes

22. Overview of the Marketing Process • Implementing the Positioning: Marketing Mix Strategy and Tactics • Product and Service Strategy and Tactics • Pricing Strategy and Tactics • Promotion Strategy and Tactics • Channels (Place) Strategy and Tactics • Integrating the Marketing Mix

23. CONSUMER BEHAVIOR • The activities that people engage in when selecting, purchasing, and using products and services so as to satisfy needs and desires. • Such activities involve cognitive and emotional processes, in addition to physical actions.

24. CONSUMER BEHAVIOR • People • Why do different consumers purchase different products? • What ways do consumer go about buying products? • Marketing • How are products designed for and sold to consumer? • How does advertising work to influence consumer preferences?