Principle of Marketing by Jeff Tarner and Mary Raymond

Principle of Marketing

1. Principles of Marketing 4.0 Jeff Tanner and Mary Anne Raymond

2. PUBLISHED BY: FLATWORLD ©2019 BY FLATWORLD. ALL RIGHTS RESERVED. YOUR USE OF THIS WORK IS SUBJECT TO THE LICENSE AGREEMENT AVAILABLE. NO PART OF THIS WORK MAY BE USED, MODIFIED, OR REPRODUCED IN ANY FORM BY ANY MEANS EXCEPT AS EXPRESSLY PERMITTED UNDER THE LICENSING AGREEMENT. Copyright page

3. CHAPTER 1 What Is Marketing?

4. KEY QUESTIONS What is marketing? Who does marketing? Why study marketing?

5. 1.1 LEARNING OBJECTIVE Define marketing and outline its components.

6. DEFINING MARKETING As defined by the American Marketing Association THE ACTIVITY, SET OF INSTITUTIONS, AND PROCESSES FOR CREATING, COMMUNICATING, DELIVERING, AND EXCHANGING OFFERINGS THAT HAVE VALUE FOR CUSTOMERS, CLIENTS, AND SOCIETY AT LARGE.

7. COMPONENTS OF MARKETING There are four components of marketing: Creating Communicating Delivering Exchanging The traditional way of viewing the components of marketing is via the four Ps: Product Promotion Place Price

8. VALUE: THE CENTER OF MARKETING

9. A MATHEMATICAL DEFINITION OF VALUE Value: The benefits buyers receive that meet their needs. Ultimately determined by the customer. What the customer gets by purchasing and consuming a company’s offering. Hassle: The time and effort the consumer puts into the shopping process. VALUE* = BENEFITS RECEIVED – (PRICE + HASSLE)

10. MARKETING CONCEPT A philosophy of creating value: Marketers seek to satisfy customer wants and needs. Every employee in the company is focused on serving the customer at a profit. These firms are said to be market oriented.

11. ORIENTATIONS OF MARKETING Production orientation: companies competed by reducing production costs. Gave rise to the production era. Selling orientation: companies pushed their products by heavily emphasizing advertising and selling. Gave rise to the selling era. Product orientation: companies focused on product innovation. Gave rise to the marketing era.

12. ERAS OF MARKETING Value era: companies emphasize creating value for customers. One-to-one era: companies compete by building relationships with customers one at a time and seek to serve each customer’s needs individually. Transformative era: marketing is transforming complete companies and products to serve customers more completely.

13. CREATING OFFERINGS THAT HAVE VALUE

14. COMMUNICATING OFFERINGS Communicating: Describing the offering and its value to your customers. Learning from customers what it is they want and like. Customers get a chance to tell the company what they think.

15. COMMUNICATING OFFERINGS (CONTINUED) Many forms of communication may be used: Advertising on the web, TV, billboards, or magazines Product placement in movies and on TV Salespeople News media Special events Sponsoring events Describing the offering and its value for the customer.

16. DELIVERING OFFERINGS Delivering an offering: More than simply getting the product into the hands of the user Making sure that the user understands how to get the most out of the product and is taken care of if he or she requires service later. Value is delivered in part through a company’s supply chain: Includes a number of organizations and functions that mine, make, assemble, or deliver materials and products from a manufacturer to consumers. Logistics: The actual transportation and storage of materials and products. The primary component of supply chain management.

17. EXCHANGING OFFERINGS Exchanging: the act of transacting value between a buyer and a seller. Exchange occurs when consumers acquire, consume, and dispose of products and services, including during the consumption phase. Sometimes for cash, sometimes for credit cards.

18. 1.1 KEY TAKEAWAYS The focus has changed from the 4 Ps to value: Product is now about creating value. Price is now about exchanging value. Place is now about delivering value. Promotion is now about communicating value. Value: The benefits an individual receives. The price the consumer paid. The time and effort the consumer expended.

19. 1.2 LEARNING OBJECTIVE Describe how the various institutions and entities that engage in marketing use marketing to deliver value.

20. WHO DOES MARKETING? Everyone does some form of marketing. Here we will focus on organizations: For-profit companies like Wal-Mart, P&G, and local businesses. Non-profits like charities, schools, hospitals, governments.

21. FOR-PROFIT COMPANIES For-profit companies do marketing: McDonald’s Procter & Gamble (the makers of Tide detergent and Crest toothpaste) Walmart For-profit companies can be defined by the nature of their customers. A B2C company sells products to be used by consumers. B2B company sells products to be used by companies, organizations, and government agencies and entities. Companies that engage in marketing can be categorized as: Manufacturer Retailer Wholesaler

22. NONPROFIT ORGANIZATIONS Nonprofit organizations also engage in marketing. This called nonprofit marketing. Government entities also engage in marketing activities. Social marketing is marketing conducted to achieve social objectives. Social marketing can be done by: Government agencies Nonprofit institutions Religious organizations

23. MARKETING YOU Completing this course will help you to more effectively: Create value. Communicate and deliver that value to the receiver. Receive something in exchange.

24. 1.2 KEY TAKEAWAYS Marketing can be thought of as a set of business practices that for-profit organizations, nonprofit organizations, government entities, and individuals can utilize. When a nonprofit organization engages in marketing activities, this is called nonprofit marketing. Marketing conducted in an effort to achieve certain social objectives is called social marketing.

25. 1.3 LEARNING OBJECTIVE Explain the role marketing plays in individual firms and society as a whole.

26. THE IMPACTS OF MARKETING ON SOCIETY Enables profitable transactions to occur Delivers value Benefits society Costs money Offers people career opportunities

27. OPPORTUNITIES AVAILABLE IN MARKETING Marketing research Merchandising Sales Advertising Product development Direct marketing Digital media Event marketing Non-profit marketing

28. CRITICISMS OF MARKETING It is costly. Prices could be lower. It fuels consumerism. Consumers want more and more products and services they don’t need.

29. KEY TAKEAWAYS By facilitating transactions, marketing delivers value to both consumers and firms. At the broader level, this process creates jobs and improves the quality of life in a society. Marketing can be costly, so firms need to hire good people to manage their marketing activities. Being responsible for both making money for your company and delivering satisfaction to your customers makes marketing a great career.

30. 1.4 LEARNING OBJECTIVE Understand and outline the elements of a marketing plan as a planning process.

31. MARKETING’S ROLE IN THE ORGANIZATION Marketing is a functional area in companies. Just like operations and accounting are. Marketing activities do not occur separately from the rest of the company.

32. MARKETING PLAN Marketing strategists develop a marketing plan from: Corporate strategy Company mission An understanding of the market STRATEGY FOR IMPLEMENTING THE COMPONENTS OF MARKETING: CREATING, COMMUNICATING, DELIVERING, AND EXCHANGING VALUE.

33. STEPS IN CREATING A MARKETING PLAN

34. THE CHANGING MARKETING ENVIRONMENT Marketing is changing along with the way business is conducted. There are several themes, or important trends: Digital information and big data Ethics and social responsibility Sustainability Service-dominant logic Metrics A global environment

35. 1.4 KEY TAKEAWAYS A company’s marketing plan flows from its strategic plan. Both begin with a focus on customers. The essential components of the plan are understanding customers, creating an offering that delivers value, communicating the value to the customer, exchanging with the customer, and evaluating the firm’s performance. A marketing plan is influenced by environmental trends such as social responsibility, sustainability, service-dominant logic, the increased availability of data and effective metrics, and the global nature of the business environment.