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BUAD 307—MARKETING FUNDAMENTALS

BUAD 307—MARKETING FUNDAMENTALS. MARKETING OVERVIEW. Learning Objectives. Identifying The scope and basic objectives of the marketing function Customer value Benefits of and opportunities for relationship marketing. Who markets? Businesses Government units Non-profit organizations

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BUAD 307—MARKETING FUNDAMENTALS

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  1. BUAD 307—MARKETING FUNDAMENTALS MARKETING OVERVIEW

  2. Learning Objectives • Identifying • The scope and basic objectives of the marketing function • Customer value • Benefits of and opportunities for relationship marketing

  3. Who markets? Businesses Government units Non-profit organizations Cause related organizations What is marketed? Goods Services Ideas Who buys? Ultimate consumers Organizational buyers For internal use For resale (wholesalers, retailers) Manufacturers (components) Customer benefits? Utility Consumption Convenience Usage and Reach of Marketing

  4. 2007American Marketing Association (AMA) Definition Marketing: “The (1) activity, (2) set of institutions, and (3) processes for (4) creating, (5) capturing, (6) communicating, (7) delivering, (8) and exchanging (9) offerings that have (10) value for (11) customers, (12) clients, (13) partners, and (14) society at large.” (Numbering added.) Definition not needed for the exam!

  5. ACTIVITY INSTITUTIONS PROCESSES MARKETING CREATION COMMUNICATION DELIVERY EXCHANGE CUSTOMERS OFFERINGS VALUE CLIENTS PARTNERS SOCIETY

  6. Marketing As an Exchange • Each side receives something more valuable than what it gave up  “win-win” deal • Part of the value may be assurance of continued quality over time (value of the brand) • In principle, money does not have to be exchanged. For goods and services, this is usually the most convenient way of trade. For ideas, there may be no monetary exchange as such.

  7. Value • Benefits—perceived by the customer (may not be objectively accurate) • Convenience • In delivery • In usage • Reliability • Durability • Performance • Style/aesthetics • Prestige • Service component • Costs—examples • Money • Time • Risk

  8. Creating, Communicating, and Capturing Customer Value AVAILABILITY EASE OF USE DELIVERY: DISTRIBUTION, EXECUTION OF SERVICES UTILITY CONVENIENCE EXCHAGE OFFERINGS: PRODUCTS, SERVICES, AND IDEAS COMMUNICATION VALUE: CUSTOMER BENEFITS BUYER CAPTURE SECURITY EFFECTIVENESS CREATION: RESEARCH, DESIGN, MANUFACTURING SELLER PLEASURE MONEY, BEHAVIOR

  9. Creating Customer Value PERCEIVED NEEDS OF OTHERS INSTINCTS BELIEFS ABOUT WHAT IS “RIGHT” MARKET RESEARCH, ANALYSIS, AND DEVELOPMENT CUSTOMER DESIRES SELLER OFFERINGS COSTS OF OFFERINGS (NEGATIVE) BELIEFS ABOUT THE WORLD BELIEFS ABOUT OFFERINGS CUSTOMER VALUE Exact model is NOT needed for exam!

  10. Customer Value: AFLAC Insurance

  11. Customer Value, Part I • Value is the ratio of the benefits received (usually goods or services) to what is given up (usually money) • For a transaction to take place, the benefits received must usually be greater than the sacrifice for both parties—usually • The customer values the goods and services received more than the money spent • The seller values the money received more than the goods or services given up (i.e., it is worthwhile to produce these in order to get this payment)

  12. Customer Value, Part II • A low priced product may not represent value to a customer if the benefits received are perceived to be low, too. • Different customer segments will have different value perceptions and desires • A product which is adapted to the needs of a particular segment can be very valuable to that segment even if the overall “quality” is not seen as superior by most other consumers • Cost may be in terms of money or other sacrifice

  13. Tools to Provide Customer Value (4Ps) • Product (both the tangible item and associated services) • Price (different segments of customers will pay different amounts depending on their product needs and preferences) • Place (distribution—making the product available where it is convenient to the customer) • Promotion (advertising, sales promotion, publicity, selling, special events)

  14. Examples of Customer Value to Different Customers

  15. Customer Value: iPhone 6

  16. Customer Value: Sally Hansen Nail Polish Cost Reduction Convenience Choice Performance Risk reduction Durability

  17. Value: Nordstrom’s

  18. Value: Walmart

  19. Value Engineering • Increasing offering value by • Decreasing cost • Improving • Durability • Performance • Reliability • Convenience • Aesthetics No box  lower cost, less waste, less bulk, less hassle

  20. Customer Value: Soda Vending

  21. Customer Value: Netflix

  22. Customer Value: Starbucks

  23. Value: Recap • A low quality, low price product represents poor value for many customers • A very high benefit product at a high price can represent value for some segments • Customer segments differ in what they find valuable

  24. Relationship Marketing • Selling (selling existing products with whatever methods are necessary) vs. marketing orientation (serving customer needs whether in current or new forms) • Maintaining a relationship with the customer over time rather than just focusing on immediate sales • Anticipating customer needs • Providing solutions • Investing in products and services optimized for the customer

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