Chapter 1 Overview of Marketing Saurabh Rawal BU352 Fall 2022 Chapter 1: Overview of Marketing A G E N DA What is marketing? What are the core concepts in marketing? How has our understanding of marketing evolved? • Four orientations of marketing What is the importance of marketing? How can marketing help your career? DEFINITION OF MARKETING Marketing is a set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships. CORE ASPECTS OF MARKETING SATISFYING CUSTOMER NEEDS & WANTS • A Need is one of the basic necessities of life. – Physical • Food, clothing, shelter – Social • Belonging (need to belong) – Individual • Knowledge, self-expression • A Want is how a need is fulfilled. E.g., While I need food, I want an energy bar – Influenced by culture, personality, or knowledge. – Can you give me an example? Need for food Want for KFC $$$ Demand for KFC A DEMAND is seen by consumer ability and willingness to fulfill their needs and wants. Understanding the needs, wants, and demands of consumers is one of the starting points of becoming a good marketer or building a successful business. SATISFYING CUSTOMER NEEDS & WANTS Successful marketers/businesses can clearly identify consumer needs and wants (CNW) they are serving. More clarity of CNW = More likely to tailor products/services to satisfy those CNW Companies can have seemingly the same product but still serve different needs and wants MARKETING ENTAILS AN EXCHANGE Exchange Trading of things of value between the buyer & the seller SELLER BUYER WHAT IS THE EXCHANGE MODEL FOR THESE ORGANIZATIONS? MODEL OF EXCHANGE Exchange Transactional model (old and outdated thinking) Exchange 2.0 Relational model MARKETING REQUIRES MARKETING MIX DECISIONS PRODUCT: CREATING VALUE Goods Services Ideas PROMOTION OF IDEAS CREATES VALUE Ideas include thoughts, opinions, philosophies, and intellectual concepts that also can be marketed. Value is created when the idea is put to use by the recipient. PRICE: TRANSACTING VALUE money Price is everything the buyer gives up in exchange for the product. time energy PLACE: DELIVERING VALUE All activities necessary to get the product to the right customer when that customer wants it. Supply chain management is the field that examines these activities. Can you tell me how the following products are delivered to consumers? PROMOTION: COMMUNICATING VALUE • The communication activities of marketing • Used to inform, persuade, and remind potential buyers • Used to influence their opinions or elicit a response SOCIAL MEDIA & MARKETING The use of digital tools to easily & quickly create & share content to foster dialogue, social relationships & personal identities. MARKETING CAN BE PERFORMED BY BOTH INDIVIDUALS & ORGANIZATIONS B2B: Wholesaling is often only Business to Business B2C: All retailing is Business to Consumer selling C2C: Swap Meets, EBay, yard sales, etc. MARKETING IMPACTS MANY STAKEHOLDERS Both profit and non-profit entities Developing economies Entire industries THE FOUR ORIENTATIONS OF MARKETING – EVOLUTION OF THE CONCEPT Marketing yesterday vs. Marketing today Mother discipline of marketing Economics Product Orientation Sales Orientation Market Orientation Value-based Orientation PRODUCT ORIENTATION Product-oriented companies focus on developing and distributing innovative products with little concern about whether the products best satisfy customers’ needs and wants. Company goal continuously improving their product/s Consumers are continuously newer and better products may not necessarily translate to consumer satisfaction SALES ORIENTATION Marketing = selling function; companies try to sell as many of their products as possible rather than focus on making products consumers really want. Company goal aggressive sales training/tactics followed by actual sales Typically practiced with products that consumers generally do not consider buying. E.g., insurance selling, investment banking, etc. MARKET ORIENTATION Market-oriented companies start out by focusing on what consumers want and need before they design, make, or attempt to sell their products and services. Company goal Need/want fulfillment VALUE-BASED ORIENTATION To compete successfully, firms focus on the triple bottom line: • People (consumer needs & wants) • Profits (long-term profitable relationships) • Planet (social and environmental responsibility) Value (and its perception) is the most important basis for marketing in today’s date. But what is value? HOW DO FIRMS BECOME MORE VALUE DRIVEN? Firms focus on four activities: • • • • Gathering and sharing Sharing information information Balance customer’s benefits & costs Balancing benefits with costs Build relationships with customers Building customer relationships Use technology to connect with customers Connecting with customers via social media WHY IS MARKETING IMPORTANT? THANK YOU Questions or comments