MKT 230 CH 1

8/3/2019 MKT 230 CH 1

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Overview of StrategicOverview of Strategic

MarketingMarketingMKT 230 Chapter 1

8/3/2019 MKT 230 CH 1


Customer Service

y Please take the first 5-10 minutes of class

to class to silently write up two recentcustomer service experiences, onehighlighting excellent customer serviceand one highlighting pathetic customer

service.y You will hand them in at the end of class.

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y Which of the two customer service

experiences is most likely to be longer?

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y The R ule of 66: On average, when acustomer has a particularly badexperience, they will tell on average 11people and these 11 people will tell anadditional 5 people each. Thus 11 time 5equals 55 and plus those original 11

people who were told the original badexperience make 66 people. See givenlink for more information on the rule of 66.

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DefinitionDefinition

y Marketing is the process of creating,

distributing, promoting, and pricinggoods, services, and ideas to facilitatesatisf ying exchange relationships withcustomers and to develop and maintain

favorable relationships with stakeholdersin a dynamic environment. This definitionis consistent with the American MarketingAssociation definition of marketing.

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y Marketing Focuses on Customersy 1. As the purchasers of the products that

organizations develop, promote, distribute, andprice, customers are the focal point of all marketing activities.

y 2. The essence of marketing is to developsatisf ying exchanges from which both customersand marketers benefit.

y Both customer and marketer expect to gainsomething of value from the exchange.

y 3. Organizations generally focus theirmarketing efforts on a specific group of customers, or target market .

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Marketing Mix or 4 p¶sMarketing Mix or 4 p¶s

y Product

y

Distribution (Place)y Promotion

y Pricing

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y The Product Variabley a) The product variable of the marketing mix deals with

researching customers¶ needs and wants and designing a product

that satisfies them.y b) A product can be a good, a service, or an idea.y (1) Good²a physical entity y (2) Service²the application of human and mechanical efforts to

people or objects to provide intangible benefits to customersy (3) Idea²concept, philosophy, image, or issuey c) The product variable includes the creation or modification of

brand names and packaging. It may also include decisionsregarding warranty and repair services.

y d) Product variable decisions and activities directly impact thecreation of products that meet customers¶ needs and wants.

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y The Distribution Variabley Distribution helps a marketing manager make

products available in the quantities desired to asmany target market customers as possibley Must keep total inventory, transportation, and

storage costs as low as possible.y Must also select and motivate intermediaries,

establish inventory control procedures andmanage transportation and storage.

y The Internet has dramatically impacteddistribution, making it faster and more wide-spread.

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y The Price Variabley a) The price variable relates to decisions

and actions associated with establishingpricing objectives and policies anddetermining product prices.

y b) Is a critical component of the marketing

mix because customers are concerned aboutthe value obtained in an exchange.y c) Is a competitive tool, but can lead to

intense price competition.

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y Marketing Builds Relationships with Customers andOther Stakeholders

y 1. Individuals and organizations engage in marketing tofacilitate exchanges²the provision or transfer of goods,services, or ideas in return for something of value.

y 2. Four conditions must exist for an exchange to occur:y a) Two or more individuals, groups, or organizations

must participate, and each must possess something of value desired by the other party.

y b) The exchange should provide a benefit or satisfactionto both parties involved in the transaction.y c) Each party must have confidence in the promise of

the ³something of value´ held by the other.y d) To build trust, the parties to the exchange must meet

expectations.

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y Marketing Builds Relationships with Customers andOther Stakeholders Continued«

y

3. An exchange will not necessarily take place justbecause these conditions exist; marketing activities canoccur even without an actual transaction or sale.

y 4. Marketing activities should attempt to create andmaintain satisf ying exchange relationships.

y 5. Marketers are also concerned with building

relationships with relevant stakeholders who have a ³stake,́ or claim, in some aspect of a company¶s products,operations, markets, industry, and outcomes; these may include customers, employees, investors and shareholders,suppliers, governments, communities, and many others.

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y Marketing Occurs in a Dynamic

EnvironmentThe marketing environment , which includescompetitive, economic, legal andregulatory, technological, and socio-cultural

forces, surrounds the customer and affectsthe marketing mix. Technological advancesare changing consumers¶ lives, preferences,and the marketing environment.

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y Managing Customer Relationshipsy A. Achieving the full profit potential of each customer

relationship should be the fundamental goal of every marketing strategy.

y B. Relationshi p marketing refers to ³long-term, mutually beneficial arrangements in which both the buyer and sellerfocus on value enhancement through the creation of moresatisf ying exchanges.́

y C. C ustomer-centric marketing requires developing

collaborative relationships with customers based onfocusing on their individual needs and concerns.y

D. C ustomer relationshi p management ( CRM) usesinformation about customers to create marketing strategieswhich develop and build long-term customer relationships.

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y Understanding the Marketing Concepty According to the marketing conce pt , an organization should try to

provide products that satisf y customers¶ needs through a

coordinated set of activities that also allows the organization toachieve its goals.y 1. Customer satisfaction is the major focus of the marketing

concept.y 2. The marketing concept stresses that marketing begins and

ends with customers. There is a positive correlation betweencustomer satisfaction and shareholder value.

y

3. The marketing concept is not: y A second definition of marketing. It is a management philosophy

guiding an organization¶s overall activitiesy A philanthropic philosophy aimed at helping customers at the

expense of the organizationy 4. It is important for marketers to consider the long-term

needs of society.

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y Value-Driven Marketingy A. To manage customer relationships, organizations must

develop marketing mixes that create value for customers.V alue is a customer¶s subjective assessment of benefitsrelative to costs in determining the worth of a product(customer value = customer benefits ± customer costs).

y B. The process people use to determine value is notscientific.

y C. In developing marketing activities, it is important to

recognize that customers receive benefits based on theirexperiences.y D. The marketing mix, especially promotional activities

and extra services or features, can be used to enhanceperceptions of value.

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y Marketing Managementy A. M arketing management is the process of planning,

organizing, implementing, and controlling marketingactivities to facilitate effective and efficient exchanges.

y B. Planning is a systematic process of assessingopportunities and resources, determining marketingobjectives, and developing marketing strategy and plansfor implementation and control.

y C. The internal structure of the marketing unit, good

coordination and communication are the keys to directingmarketing activities.y D. The marketing control process consists of establishing

performance standards, comparing actual performancewith established standards, and reducing the differencebetween desired and actual performance.

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y The Importance of Marketing in Our Global Economyy A. Marketing Costs Consume a Sizable Portion of Buyers¶

Dollarsy B. Marketing Is Used in Nonprofit Organizationsy C. Marketing Is Important to Business and the Economyy D. Marketing Fuels Our Global Economyy E. Marketing Knowledge Enhances Consumer Awarenessy F. Marketing Connects People through Technologyy G. Socially Responsible Marketing can Promote theWelfare of Customers and Society

y H. Marketing Offers Many Exciting Career Prospects

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y Customer Service-: H ow many of you

have ever ex perienced rejection or disa ppointment in a customer serviceex perience?

y (http://www.youtube.com /watch?v=WZ3

AOmZ2fps)

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y The Promotion Variable

y W hy are more and more com paniesseeking out advertising ideas from

consumers? W ouldn¶t it be better to hire professional advertising agencies?

y H ow have Doritos, Starbucks, and Dell utilized digital media and the Internet toreach target market and generate interest in products?

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y The Exchange

y W hy is the exchange at the core of all marketing transactions? W hy is it crucial

to think marketing is a pplicable toexchanges beyond buyers and sellers?

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y E-Marketing ± Webinary The Most Legendary Marketing Showdowny Showdown #1 Coca Cola v. Pepsiy Showdown #2 Apple v. Microsoft

y Showdown #3 Red Sox v. Yankeesy Showdown #4 McDonald¶s v. Burger King

y

Showdown #5 Target v. Walmarty http://www.hubspot.com /marketing-grader-

webinar-thanks /?guid=b9734a1b-4b28-402a-9f86-8efa80592fe5&submissionGuid=5f299834-fa22-4138-9649-efce0d038ebf

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y E-Marketing ± Webinar

y The Most Legendary Marketing Showdown

y

Showdown #1 Coca Cola v. Pepsiy Showdown #2 Apple v. Microsoft

y Showdown #3 Red Sox v. Yankees

y Showdown #4 McDonald¶s v. Burger King

y Showdown #5 Target v. Walmart

y http://www.hubspot.com /marketing-grader-webinar-thanks /?guid=b9734a1b-4b28-402a-9f86-8efa80592fe5&submissionGuid=5f299834-fa22-4138-9649-efce0d038ebf

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y Key Takeaways

MKT 230 CH 1

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