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What is marketing


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Another great powerpoint from the great Professor Edward Bernays-Sauce

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What is marketing

  2. 2. 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… …Peel Trident
  3. 3. MORE BROADLY… • 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.
  4. 4. 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.”
  5. 5. THE MARKETING PROCESS Understand the marketplace and customer needs and wants Design a customer-driven marketing strategy -- Product, price, placement, promotion Construct an integrated marketing program that delivers superior value Build profitable relationships and create customer delight Capture value from customers and customer equity
  6. 6. 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 eunuch husband.”
  7. 7. LET’S EXPLORE FIVE CORE CUSTOMER AND MARKETPLACE CONCEPTS 1) Needs, wants, and demands 2) Market offerings (products, services, and experiences) 3) Value and satisfaction 4) Exchanges and relationships 5) Markets
  8. 8. 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.
  9. 9. 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
  10. 10. 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
  11. 11. 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.”
  12. 12. MARKET OFFERING • 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 brand experience • You don’t just go to Lincoln Center to watch the Philharmonic, you experience the Philharmonic The Philharmonic experience…at $150 a ticket.
  13. 13. 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.”
  14. 14. 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.”
  15. 15. MARKETING MANAGEMENT • The art and science of choosing target markets and building profitable relationships
  16. 16. SELECTING CUSTOMERS • It’s about segmentation How does a maker of outdoor products, such as the tent seen here, segment markets? A. Demographically B. Behavioristically C. Physically D. Psychically E. Physiognomically F. Psychographically G. With a slicer
  17. 17. 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.”
  18. 18. MARKETING ORIENTATIONS • 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 innovative features. • 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.
  19. 19. COMPARING CONCEPTS • The Selling Concept (top) • Can you think of a company that adopts this approach? • The Marketing Concept (below) • Can you think of a company that uses this approach? Factory Existing Products Selling And Promotion Profits through sales volume Market Customer Needs Integrated Marketing Profits through customer satisfaction
  20. 20. 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 model? • What other companies are oriented this way? Societal Marketing Concept Consumers (want satisfaction) Society (Human welfare) Company (Profits)
  21. 21. 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 relationships? A. By stacking people as shown to the left? B. By providing value-added service, such as a personal shopper? C. By coming to your home and changing your screaming baby’s diapers? D. By calling you every day to remind you to take your Gummy Bear multi-vitamins?
  22. 22. 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?
  23. 23. 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 brand.
  24. 24. 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.”
  25. 25. 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 cocaine.
  26. 26. HOW DO WE GET VALUE FROM OUR CUSTOMERS • Current and future sales • Market share • Profits “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.”
  27. 27. 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?” “What?” “They gave me a refund! I love those guys!” “That’s because your father molested you, and your mother was distant and aloof.”
  28. 28. 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 bagel.”
  29. 29. CUSTOMER RELATIONSHIP GROUPS Potentialprofitability Butterflies Good fit between company’s offerings and customer’s needs; high profit potential; but flit from company to company. True Friends Good fit between company’s offerings and customer’s needs; highest profit potential Strangers Little fit between company’s offerings and customer’s needs; lowest profit potential Barnacles Limited fit between company’s offerings and customer’s needs; low profit potential 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 strategies. Short term customers Long term customers Projected Loyalty High Profitability Low Profitability
  31. 31. 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.”
  32. 32. DEFINITION OF PUBLIC RELATIONS (PRSA) • Public relations is a strategic communication process that builds mutually beneficial relationships between organizations and their publics.”
  33. 33. 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.”
  34. 34. MARKETING… • …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?
  35. 35. PUBLIC RELATIONS • …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. A steakholder
  36. 36. ULTIMATELY, THOSE STAKEHOLDERS… • Provide us with quality labor • Can be loyal employees • Make life easier or more difficult for the company to survive • Enablers • Adversaries 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.
  37. 37. THINK OF THE MARKETING EFFORT • …as a series of wavelengths • Products enter the market, grow (or not), plateau, and then die, replaced by newer, better products.
  38. 38. 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 muffin.
  39. 39. MARKETING IS… • Product focused • Product branding “Wow, that Lindsay Lohan is one nice product!”
  40. 40. PUBLIC RELATIONS… • *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.”
  41. 41. 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!
  42. 42. PUBLIC RELATIONS GOES ON AFTER A PRODUCT IS BURIED • “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.”
  43. 43. 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. LogosEthos Pathos
  45. 45. 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?” “Lunch.” “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.”
  46. 46. NEXT WEEK… Dorothy ponders opening a balloon company in Lakehurst, New Jersey and naming her balloon the Hindenburg.