MKC1-Chapter 1: What is Marketing?

marketing concept

A philosophy underlying all that marketers do, driven by satisfying customer wants and needs.

supply chain

All of the organizations that participate in the production, promotion, and delivery of a product or service from the producer to the end consumer. (wholesalers, transportation companies, retailers, etc.)

sustainability

An example of social responsibility that involves engaging in practices that do not diminish the earth's resources.

production era

Began with the Industrial Revolution in the late 1800s and lasted until the 1920s, when production-capacity growth began to outpace demand growth and new strategies were called for.

communicating

Broadly, describing those offerings, as well as learning from customers.

B2B

Business to business company. Sells products to be used within another company's operations as well as by government agencies and entities.

B2C

Business to consumer company. Sells products to be used by consumers.

four components of marketing

Creating, communicating, delivering, and exchanging

value era

From 1990s to the present, a time when companies emphasize creating value for customers. Some contend that this is an extension of the marketing era and is not a separate era.

selling era

From the 1920s until after World War II, consumers during the Great Depression and World War II did not have as much money, so the competition for their available dollars was stiff. The result was this push approach.

one-to-one era

From the 1990s to the present, the idea of competing by building relationships with customers one at a time and seeking to serve each customer's needs individually.

product

Goods and services (creating offerings).

communicating offerings

In marketing, a broad term meaning describing the offering and its value to potential customers, as well as learning from customers. To be successful today, companies need a more interactive dialog with their customers.

nonprofit marketing

Marketing activities conducted to meet the goals of nonprofit organizations.

social marketing

Marketing conducted in an effort to achieve social change.

marketing enables profitable transactions to occur

Marketing helps facilitate exchanges between buyers and sellers for the mutual benefit of both parties. Good social marketing provides people information and helps them make healthier decisions.

market oriented

The degree to which a company follows the marketing concept.

offering

The entire bundle of a tangible good, intangible service, and price that composes what a company offers to customers.

social responsibility

The idea that companies should manage their businesses not just to earn profits but to advance the well-being of society.

value

Total sum of benefits received that meet a buyer's needs. It is at the center of everything marketing does. What the customer gets by purchasing and consuming a company's offerings. Determined by the customer.

exchanging

Trading value for those offerings.

metrics

Used to create better offerings, better communication plans, etc. Better information technology has given us a much more complete picture of each exchange.

event marketing

plan special events, orchestrating face-to-face conversations with potential and current customers in a special setting.

market oriented firms

recognize that exchange must be profitable for the company to be successful. It is not an excuse to fail to make profit.

Marketing

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

marketing delivers value

to both the customer and the company. The value marketing delivers to customers translates into the value of the firm as it develops a reliable customer base and increases its sales and profitability.

marketing offers people career opportunities

Marketing is the interface between producers and consumers. It is the one function in the organization in which the entire business comes together. Responsible for both making money for the company and delivering satisfaction to the customers.

exchange occurs

When consumers acquire, consume (use), or dispose of products and services. (selling an iPhone to a friend, trading in a car, asking Salvation army to pick up old refrigerator)

direct marketing

communicate directly with customers about a company's product offerings via channels such as email, chat lines, telephone, or direct mail.

merchandising

responsible for developing strategies regarding what products wholesales should carry to sell to retailers.

product development

responsible for identifying and creating features that meet the needs of a firms customers. Often work with engineers or other technical personnel to ensure value is created.

forms of communications

advertising on the web or television, on billboards or in magazines, through product placements in movies, and through salespeople, having news media cover the company's actions, participating in special events, sponsoring special events.

marketing benefits society

by improving people's lives in two ways. Facilitating trade (which creates jobs) and the value delivery function. Being able to trade, more choices, and smarter consumers are all indicative of a better quality of life.

marketing costs money

can sometimes be the largest expense associated with producing a product. When marketing results in more informed consumers receiving a greater amount of value, the cost is justified.

marketing plan

A document that is designed to communicate the marketing strategy for an offering. The purpose of the plan is to influence executives, suppliers, distributors, and other important stakeholders of the firm so they will invest money, time, and effort to ensure the plan is a success.

service-dominant logic

An approach to business that recognizes that customers do not distinguish between the tangible and intangible aspects of a good or service, but rather see a product in terms of its value. Consumers want value no matter how it is delivered.

ethics and social responsilbility

Businesses exist because society allows them to. When businesses fail society, society will punish them or revoke their license. Today businesses are being held to higher standards of conduct.

promotion

Communication

selling oriented

Companies believed it was necessary to push their products by heavily emphasizing advertising and selling.

production oriented

Companies believed that the best way to compete was through product innovation and by reducing production costs. In other words, companies thought that good products would sell themselves.

a global environment

Every business is influenced by global issues. For example, the price of oil is a global concern that affect's everyone's prices and the availability of some or all offering.

place

Getting the product to a point at which the customer can purchase it (delivering).

delivering

Getting those offerings to the consumer in a way that optimizes value.

the equation is personal because

How each consumer judges the benefits of a product will vary, as well as the time and effort he or she puts into shopping. Value varies for each customer.

delivering offerings

In marketing, as in delivering value, a broad term that means getting the product to the consumer and making sure that the user gets the most out of the product and service.

marketing era

In the post-World War II environment, demand for goods increased as the economy soared. Some products, limited in supply during World War II, were now plentiful to the point of surplus. Consumers had many choices available to them, so companies had to find new ways to compete. During 1950 to 1990, the marketing concept was developed.

price

The monetary amount charged for the product (exchange).

personal value equation

The net benefit a consumer receives from a product less the price paid for it and the hassle or effort expended to acquire it. value = benefits received - [price+hassle]

service-dominant logic era

The period from 1990 to the present in which some believe that the philosophy of service-dominant logic dominates the way firms compete.

logistics

The physical flow of materials in the supply chain (the actual transportation and storage of materials and products). Primary component of supply chain management.

creating

The process of collaborating with suppliers and customers to create offerings that have value.

hassle

The time and effort the consumer puts into the shopping process.

four Ps

The traditional way of viewing components of marketing. Product, promotion, place, and price. Introduced in the 1950s, called the marketing mix (marketing is a mix of these four components).

exchanging offerings

The transaction of value, usually economic, between a buyer and seller. (pay cash for products and services, "pay" for airline tickets using frequent-flier miles, "pay" for hotel with Hilton Honors, cash back points on credit card to pay for meals, etc.)

sales

meet with customers, determine their needs, propose offerings, ensure customer satisfaction.

marketing research

study markets and customers to better understand what strategies or tactics work best for firms.

advertising

television commercials, print ads, ads for web sites, pop-up ads, podcasts, etc.