WHAT IS MARKETING…
AND, HOW DOES PR DIFFER – OR NOT
SEE HOW MUCH OF THE MARKETING FUNCTION IS SIMILAR TO PR…AND
HOW MUCH ISN’T
“Crazy, man. We just went marketing. We didn’t
DEFINITION OF MARKETING
• Managing Profitable Customer Relationships…by meeting their needs, wants, demands through better
products, better value
People need transportation.
Americans want cars
If we had enough money, we’d demand a
Mercedes, but we’ll settle for a…
• Marketing is a social and managerial process by which individuals and organizations obtain what they
need and want through creating and exchanging value with others (company and customer)
Herewith an example of a reciprocal exchange. Camryn
buys $3,000 worth of clothing from Extravagance, and, in
return, Extravagance gets $3,000 in cash from her husband.
SO, FROM AN ECONOMICS PERSPECTIVE…
• People want stuff, and organizations want money. The organization sells a product, the consumer
“sells” his or her money. A voluntary exchange takes place, everyone lives happily ever after, or until
people decide they want more stuff, and an organization wants more money.
“I love your stuff. Can I get a half pound?”
“That’s a half pound of stuff. Oh, by the way,
we’ve got a special on junk.”
THE MARKETING PROCESS
customer needs and
Design a customer-driven
marketing strategy --
Product, price, placement,
Construct an integrated
marketing program that
delivers superior value
relationships and create
CUSTOMERS DON’T HAVE TO BE “US;” THEY CAN BE
AN ORGANIZATION’S SUPPLIERS
“Acme Slashers sold me this brand new slicer, and I’m very
happy. This thing can slice through anything – turkey, ham,
baloney, even a finger or two, even my husband’s…you know.
That’s why my customers call me eight-fingers Sally, with the
LET’S EXPLORE FIVE CORE CUSTOMER AND
1) Needs, wants, and demands
2) Market offerings (products, services, and experiences)
3) Value and satisfaction
4) Exchanges and relationships
WHAT’S A NEED?
• Felt deprivation – physical, safety, social, needs for knowledge and self-expression
The wrong kind of “knead.” However, the
knead for dough is universal. Bringing
home bread takes the cake.
THAT’S WHY MASLOW CALLED IT THE…
• Great pyramid at Giza
• Great pyramid of Gaga
• Hierarchy of needs
• A pyramid scheme
• A slice of pizza from the pizzeria at Gizza
WHAT’S A WANT?
• The form human needs take as shaped by culture and individual personality
• E.g. We need food, but Americans want a Big Mac
• E.g. We need food, but Cannibals want some guy named Mac
WHAT’S A DEMAND
• A want backed by buying power
“Lady, I got the power. I want what you got.”
“I got a good for nothing 45 year old
husband. You can have him.”
• The combination of product, service, information, ideas or experiences
• When marketers look beyond the product itself and include service, experience, et al, they create a
• You don’t just go to Lincoln Center to watch the Philharmonic, you experience the Philharmonic
The Philharmonic experience…at $150
SUCCESSFUL MARKETERS DELIVER…
• …the right mix of product and experience to achieve customer value
“Now that’s what I call delivering customer value.”
“You think so? I think it needs a little salt.”
WHAT PR PEOPLE CALL PUBLICS, MARKETING PEOPLE
REFER TO AS MARKETS (MOSTLY)
• Is it true?
A. Markets simply refer to the set of actual and potential buyers of a product
B. Publics also encompass stakeholders, who can impact the company in ways not just financial
“I’ve always considered myself a market.
How ‘bout you, Janey?”
“I’m definitely a public. What are you, Joan?”
“I’m a tekram. I’m dyslexic.”
• The art and science of choosing target markets and building profitable relationships
• It’s about segmentation
How does a maker of outdoor products,
such as the tent seen here, segment
G. With a slicer
CHOOSING A VALUE PROPOSITION
• The set of beliefs or values the product or brand promises to deliver
• E.g. AT&T – “It’s Your World – Delivered.”
• E.g. Zappos – “Powered by Service.”
• E.g. Montclair State University – “It’s all Here.”
• 1. Production Concept – customers favor products that are available and highly affordable.
• 2. Product Concept – customers favor products that offer the most in quality, performance, and
• 3. Selling Concept – customers will not buy enough of the firm’s products unless it undertakes a large-
scale selling and promotion effort. E.g. flood insurance, donating blood. Doesn’t build relationships.
Focuses on selling.
• 4. Marketing Concept – achieving organizational goals depend on knowing the needs and wants of
target markets and delivering the desired satisfaction better than the competition. Customer centered.
• 5. Societal Marketing Concept – questions whether the pure marketing concept overlooks possible
conflicts between consumer short-run wants and consumer long run welfare. In other words, benefits
both consumer and society.
• The Selling Concept (top)
• Can you think of a
company that adopts this
• The Marketing Concept
• Can you think of a
company that uses this
Profits through sales
Profits through customer
SOCIETAL MARKETING CONCEPT
• J & J stresses honesty,
integrity, and putting
people before profits.
Doing what’s right
benefits both consumers
and the company.
• Does Tom’s Shoes fit the
• What other companies
are oriented this way?
CUSTOMER RELATIONSHIP MANAGEMENT
• …is the overall process of building and maintaining profitable customer relationships by deliver superior
customer value and satisfaction
How does Nordstrom’s deliver and maintain profitable
A. By stacking people as shown to the left?
B. By providing value-added service, such as a personal
C. By coming to your home and changing your screaming
D. By calling you every day to remind you to take your
Gummy Bear multi-vitamins?
CRM BUILDING BLOCKS
• Customer Value – customer evaluation of the difference between benefits and costs of your product
versus the competition (e.g. Do you think spending more for Starbucks coffee is a value to you?)
• Customer Satisfaction – product’s perceived performance matching customer expectation (e.g. “I
expected much more from my Dell computer.)
• What are some ways companies deliver value and/or satisfaction?
BEYOND CUSTOMER RELATIONSHIP MARKETING
• CUSTOMER MANAGED RELATIONSHIPS – Customers, empowered by technology, interact with
companies and with each other to shape their relationships with brands
A sales person from Royal Dalton China
helping shape a relationship with the
CONSUMER GENERATED MARKETING
• Brand exchanges created by consumers themselves – both invited and uninvited – by which consumers
are playing an increasing role in shaping their own brand experiences with other consumers. E.g. User-
generated YouTube content by Tostitos customers.
“I just posted a suggestion to the Harley
Davidson Facebook page. To create a value-
added experience, when a woman buys a hog,
it should come with Brad Pitt riding it.”
PARTNER RELATIONSHIP MANAGEMENT
• Working closely with partners in other company departments and outside the company to jointly bring
greater value to customers.
• Bringing suppliers and other supply chain partners to offer greater value
Starbucks buyers work with Columbia coffee
bean growers to bring greater value to
customers. Beginning December 1, the new
coffee formulation will have just a splash of
HOW DO WE GET VALUE FROM OUR CUSTOMERS
• Current and future sales
• Market share
“Welcome to our humble home. Our daughter says
you’re the sales guy who sold her her new car?”
“Thanks to you, the Miller family, I was able to make
enough money to get some hair plugs.”
BY CREATING VALUE…
• …the business creates highly satisfied customers who stay loyal and buy more.
• …they tell others about their experience.
“So, I went to customer service and said, ‘okay, so the
shoes are five years old, but they never fit, and I want my
money back.’ And you know what?”
“They gave me a refund! I love those guys!”
“That’s because your father molested you, and your
mother was distant and aloof.”
CUSTOMER LIFETIME VALUE
• The value of the entire stream of purchases that the customer would make over a lifetime of purchases
“That’s a dollar-fifty a day for coffee, and two bucks for a
buttered bagel. That’s 24.50 a week, and $1,274 a year.
Holy cow! For that money, I could take my wife to Las
Vegas for a week…on second thought, I’ll keep buying the
CUSTOMER RELATIONSHIP GROUPS
Good fit between
company’s offerings and
customer’s needs; high
profit potential; but flit
from company to company.
Good fit between
company’s offerings and
highest profit potential
Little fit between
company’s offerings and
customer’s needs; lowest
Limited fit between
company’s offerings and
customer’s needs; low
True friends: The firm wants to make
continuous relationship investments
to delight these good customers and
turn them into “true believers,” loyal
customers who will tell others about
their good experience.
Barnacles: If they cannot be made
profitable, they should be “fired.” An
example is smaller bank customers
who bank regularly but do not
generate enough returns to cover the
costs of maintaining their accounts.
Different groups of customers require
different relationship management
Short term customers Long term customers
AND SO, WE DEFINE MARKETING…
• As the process of building profitable customer relationships by creating value for customers and
capturing value in return
“That’s better. Now, That you’ve offered some
value, I’ll buy the stockings.”
DEFINITION OF PUBLIC RELATIONS
• Public relations is a strategic communication process that builds mutually beneficial relationships
between organizations and their publics.”
SO, WHAT’S THE DIFFERENCE?
• Where does marketing end and PR begin, or, is there lots of overlapping going on?
“It’s a real conundrum.”
• …attempts to create a positive and profitable relationship with its customers by delivering value
through its products and services only
Dominos delivers value with a tasty
pepperoni pie and timely delivery.
Where’s the Pepsi?
• …attempts to create a positive relationship with not just customers, but stakeholders as well…people
who can influence a company in either positive or negative ways.
ULTIMATELY, THOSE STAKEHOLDERS…
• Provide us with quality labor
• Can be loyal employees
• Make life easier or more difficult for the company to survive
When local residents found out a new
Dunkin Donuts was opening down the
street, they couldn’t wait to fill out an
application. WAIT! No! I was wrong. It’s
the unemployment line.
THINK OF THE MARKETING EFFORT
• …as a series of wavelengths
• Products enter the market, grow (or not), plateau, and then die, replaced by newer,
THE PUBLIC RELATIONS FUNCTION IS…
• Ongoing, constant, eternal vigilance, measuring stakeholder perceptions to make sure the PR/Ph
balance is maintained. Think of a straight line.
Here, a group tests the PR/Ph balance. Shirley, on the left, thinks
it’s a little acidic, while Heather (second from right), thinks it’s too
alkaline. Jennifer (in blue) is hoping there’s a bathroom nearby,
while, Joan (right) just bit into a rusty nail embedded in a pumpkin
• Product focused
• Product branding
“Wow, that Lindsay Lohan is one nice product!”
• *Focuses (generally) on the company
• Focuses on corporate messaging
* Exception: Marketing PR, which is a marketing tool
“It’s a bird…it’s a plane. No, it’s…a fungal
cream. Must be marketing.”
THE PUBLIC RELATIONS FUNCTION…
• …both precedes and follows a product’s life cycle.
• It’s both the fertilizer that helps the product grow and the mulch that gets tilled into the soil after the
product dies, fertilizing future marketing efforts.
Good bye, Mr. Flip
Phone. At least you’ll
help the next phone
live a happy life.
Hurry, I want to
get to the Apple
store at 9. The
new Iphone’s out!
PUBLIC RELATIONS GOES ON AFTER A PRODUCT IS
• “Good bye, Crystal Pepsi. We’ll miss you.”
• “What’ll we do now…(sniff, sniff)?”
• “Have you tried Sprite? I hear he’s a nice guy.”
SO, WHEN NEW PRODUCTS ARE INTRODUCED
• The corporate Ethos – one of the three legs of the rhetorical triumvirate – and
the one most important for establishing credibility and “persuasability” –
helps make marketing products easier.
AND SO, IT TAKES US BACK TO THE VERY FIRST
CHAPTER WE READ ON…
THAT’S WHAT PUBLIC RELATIONS DELIVERS
• Unfortunately, few practitioners can articulate this.
• And, it’s why most PR people find themselves reporting to marketing mangers.
“So, what do you PR guys actually do?”
“It’s 9:30 in the morning. A little early for lunch.”
“No, that’s what we PR guys do. We buy lunch. And,
we’re damn good at it, too.”
Dorothy ponders opening a balloon
company in Lakehurst, New Jersey and
naming her balloon the Hindenburg.