Chapter 1: Overview of Marketing Notes
Overview of Marketing
•Essentially about creating value for consumers and company's shareholders
•Creating value for consumers and firm requires that marketers develop and nurture long-term, profitable relationships with consumers
What is marketing
•Exchanging something of value that satisfies a need
•Firms develop a marketing plan that specifies marketing activities for a specific period of time
•Buyer and seller should be satisfied with value they obtained from a transaction
•Marketing: A set of business practices designed to plan for and present an organization's products or services in ways that build effective customer
•Marketing Plan: A written document composed of an analysis of current marketing situation, opportunities and threats for firm, marketing
objectives and strategy specified in terms of four Ps, action programs, and projected or pro forma income (and other financial) statements
Marketing Is About Satisfying Customer Needs and Wants
•Need: A person feeling physiologically deprived of basic necessities, such as food, clothing, shelter, and safety.
•Want: particular way in which a person chooses to satisfy a need, which is shaped by a person's knowledge, culture, and personality
•Market: Refers to groups of people who need or want a company's products or services and have ability and willingness to buy them.
•Target market: customer segment or group to whom firm is interested in selling its products and services.
•To understand needs and wants, company must identify customers or market for its product or service
•Marketers divide market into subgroups or segments of people to whom they are interested in marketing their products, services, or ideas.
•Process of identifying customer segments company wants to target with its products and services requires market research
Marketing Entails Value Exchange
•Exchange: trade of things of value between buyer and seller so that each is better off as a result.
•Sellers provide goods or services, then communicate and facilitate delivery of their offering to consumers
•Buyers complete exchange by giving money and info to seller
Marketing Requires Product, Price, Place, and Promotion Decisions
•Marketing mix: Product, price, place, and promotion— controllable set of activities that a firm uses to respond to wants of its target markets.
•Product: Creating Value
oCreate value by developing a variety of offerings
oServices are intangible customer benefits that are produced by people or machines and not be separated from producer
oIdeas: Include thoughts, opinions, philosophies, and intellectual concepts.
oExchange of value they have adopted, or become “purchasers,” of idea that group marketed
•Price: Transacting Value
oPrice: overall sacrifice a consumer is willing to make—money, time, energy—to acquire a specific product or service
oMust determine price of a product carefully on basis of potential buyer's belief about its value
oKey to determining prices is figuring out how much customers are willing to pay so that they are satisfied with purchase and seller
achieves a reasonable profit
•Place: Delivering Value
oDescribes all activities necessary to get product from manufacturer or producer to right customer when that customer wants it
oConcerned with developing an efficient system for merchandise to be distributed in right quantities, to right locations, and at right time
in most efficient way in order to minimize systemwide costs
oConcerned with developing an efficient system for merchandise to be distributed in right quantities, to right locations, and in most
efficient way to minimize systemwide costs while satisfying service levels required by customers
•Promotion: Communicating Value Even best products and services will go unsold if marketers not communicate their value to customers
oCommunication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions
or elicit a response
oGenerally enhance a product or service's value
o deliver greater value to consumers by configuring four Ps as a whole rather than by treating them as separate components
Marketing Is Shaped by Forces and Players Within Firm
•Marketers to deliver best value to their customers, they must leverage full potential of their internal capabilities; work effectively with their partners
(i.e., suppliers, distributors, and other intermediaries, such as financial institutions, advertising agencies, and research firms); and constantly evaluate
and respond to competitive environment
Marketing Is Shaped by Forces and Players External to Firm
•Such as cultural, demographic, social, technological, economic, and political and legal changes shape a company's marketing activities
Marketing Be Performed by Both Individuals and Organizations
•Marketing intermediaries, such as retailers, accumulate merchandise from producers in large amounts and then sell it to you in smaller amounts
•B2C (business-to-consumer): process in which businesses sell to consumers.
•B2B (business-to-business): process of selling merchandise or services from one business to another.