MTKG 325Principles of Marketing Karen Porter Syllabus osmm.net/bmkt325 Who am I?
Information Sheets Name Major Where you work Any marketing-related job experience Career goals Something unique about you/ what you like to do in Missoula/where you’re from
Marketing Careers • Marketers: • May have a wide variety of job titles • Work cross-functionally within the firm • Work in a wide variety of types of organizations • See Table 1.1, p. 7-8 • Marketing Mgr Median $100K Get the scoop on marketing salaries! Visit the Occupational Outlook Handbook!
Marketing Career Opportunities • Advertising • Agencies (1 person – intl) • In-house (Aramark – childcare) • Media • Brand Management • Karen: Lottery / Childcare • B2B Marketing • Karen: Consulting
Marketing Career Opps • Supply Channel Management (ex: TLC) • Direct Response Marketing • International Marketing • Marketing Models / Systems Analysis • Marketing Research • New Product Development (ex: TLC) • Retail Management (ex: store & ecom)
Marketing Career Opps • Services Marketing (ex: childcare, edu) • Sales & Sales Management (ex: TLC) • MISSING FROM TEXT: • Website Development and Online Marketing • Social Media Management • Mobile Marketing
The Value of Marketing • What is marketing? • The activity, institutions, and functions/ processes for • Creating, communicating, and delivering value to customers • Managing customer relationships to benefit the firm (organization) and its stakeholders (customers, clients, partners, society).
Marketing Meets Needs • Marketing meets the needs of diverse stakeholders • Stakeholders are buyers, sellers, investors, community residents, citizens • Marketing concept • First identify customer needs • Then provide products that satisfy those needs • While making a profit/remaining in business
Marketing Is about Creating Utility • Utility: The sum of the benefits a customer receives from using a product/service • Form utility – What comprises the product or service • Place utility – Where that product is delivered(and is it accessible?) • Time utility – When is it available? (ex: rental cars) • Possession utility – Give consumers choices to own or experience the product or service
Marketing Is About Exchange Relationships • Exchange - the heart of every marketing act • An exchange occurs when something is obtained for something else in return • Nonprofits: motivating, educating, or delighting the public • Value is in the eye of the beholder • Discuss: shoes / cars • Marketers must create an attractive value proposition - WIIFM
The Evolution of Marketing • The Production Era • Production orientation • The Sales Era • Selling orientation • The Relationship Era • Consumer orientation • Total quality management • The Triple Bottom Line Era
The Evolution of Marketing: The Production Era • Dominated by production orientation: • Marketing played insignificant role • A management philosophy that emphasizes the most efficient ways to produce and distribute products • Demand exceeded supply • Marketing played an insignificant role • Examples of products created under a production orientation: • Henry Ford’s Model T and Ivory soap
The Evolution of Marketing: The Selling Era • When product availability exceeds demand, businesses may focus on a one-time sale of goods rather than repeat business • Great Depression • After WWII • Dominated by selling orientation: • Managerial view of marketing as a sales function, or a way to move products out of warehouses to reduce inventory (hard sell / “buyer beware”)
The Evolution of Marketing: The Relationship Era 70s - Inflation / 80s Recession Shifting focus to a customer orientation/marketing concept: • A management philosophy that emphasizes satisfying customers’ needs and wants • Marketing becomes more important in the firm • Total Quality Management (TQM) is widely followed in the marketing community
The Evolution of Marketing: The Triple Bottom Line Era • Focuses on building long-term bonds with customers: CRM • Seeks to maximize the financial, social, and environmental bottom lines (profit, people, planet) • Make Money and a Contribution = Corporate Social Responsibility (CSR) – company supports social causes • Sustainability: Creating products that meet present needs and ensuring that future generations can have their needs met • Greater focus on accountability-marketing metrics • ROI (Return on Investment) is the direct financial impact of a firm’s expenditure of resources such as time or money
What Can Be Marketed? • From “serious” goods/services to fun things • Product: any good, service, or idea • Consumer goods/services • Chia pets, Ben & Jerry, NFL, soup, dental care • Business-to-business goods/services • Consulting, software, medical equipment, etc. • Not-for-profit marketing • United Way, Race for the Cure, etc. • Idea, place, and people marketing • Meth – Not Even Once, Taylor Swift, Travel MT • YOU!
The Marketing of Value • Value: • The benefits a customer receives from buying a good or service • JM: relative to price paid + non-monetary costs • Marketing communicates the value proposition: • A [statement] that fairly and accurately sums up the value that the customer will realize if he/she purchases product/service
Value from the Customer’s Perspective • Customer perspective: • Value is the ratio of costs (price) to benefits (utilities) • Value proposition includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself • Brand image is a critical component
Building LONG-TERM Value Through Customer RELATIONSHIPS • Customers are now regarded as partners rather than victims • It is more expensive to attract new customers than to retain current ones • Calculating the lifetime value of a customer allows a firm to decide which customers are “worth keeping” vs. which should be “fired”
The Value of a Customer to the Firm: A CRM Perspective “Customer Relationship Marketing” Transaction vs. relationship focus Lifetime value of a customer Cheaper to retain current customers than attract new ones 80/20 rule: Not all customers are created equal Company may sacrifice short-term gains for life-time value
More on CRM More in Ch. 4, Ch. 7, Ch. 12 21 • “Permission-based” marketing: opt-in • Individualized offers • Database used for • Tiering • Tailoring • Also: cross-sell; up-sell; bundle
Providing Value Through Competitive Advantage • Creating a competitive advantage requires: • Identification of a distinctive competency:The ability of a firm to outperform the competition by providing customers with a benefit the competition cannot provide
Consumer-Generated Value:Facilitated by Web 2.0 • “User-generated content” • Everyday people functioning in marketing roles such as: • Creating ads • Providing input into new product development • Serving as retailers • Social networking is growing explosively • Wisdom of crowds • Open source business models
Value from Society’s Perspective • Marketing transactions and company activities influence the world and add or subtract value from society • Stressing ethical or socially responsible decisions is often good business in the long run
The Dark Side of Marketing • Marketing is often criticized • Illegal practices do occur • Some marketing activities have detrimental effects on society • The dark side of consumer behavior: • Terrorism, addictive consumption, exploitation, illegal activities, shrinkage, anticonsumption
Marketing as a Process • Marketing planning (thinking carefully and strategically about the big picture) • Analyzing the marketing environment • Developing a marketing plan • Deciding on a market segment • Choosing the marketing mix—product, price, promotion, and place
Marketer’s Strategic Toolbox: The Marketing Mix (4 Ps) Product Place Price: Value = Benefits (functional + symbolic)/Price ($ + Non-monetary) Promotion (Marketing Communications) advertising, public relations, personal selling, sales promotion
4Ps Mandatories Each P must align with target market needs & expectations Each P must align with the other P’s Consistency Synergy Examples: Godiva vs. Hershey Bud vs. __?