BUAD 307—MARKETING FUNDAMENTALS MARKETING OVERVIEW.

BUAD 307—MARKETING FUNDAMENTALS

MARKETING OVERVIEW

Perner 2BUAD 307MARKETING OVERVIEW


Learning Objectives

• Identifying– The scope and basic objectives of

the marketing function

– Customer value

– Relationship marketing


2007 American 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!


MARKETING

ACTIVITY PROCESSESINSTITUTIONS

CREATION COMMUNICATION DELIVERY EXCHANGE

OFFERINGS VALUE

CUSTOMERS

CLIENTS

PARTNERS

SOCIETY


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.


Usage and Reach of Marketing

• 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


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

COSTRECEIVED BENEFITS

VALUE


CUSTOMER DESIRES

INSTINCTS

BELIEFS THE PRODUCT

BELIEFS ABOUT THE WORLD

PERCEIVED NEEDS OF OTHERS

SELLER OFFERINGS

COSTS OF OFFERINGS(NEGATIVE)

CUSTOMER VALUE

BELIEFS ABOUT WHAT IS “RIGHT”


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)


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

• 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


Tools to Provide Customer Value

• 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)


Example of Customer Value: Tivo


Customer Value: Ziploc Bags


Customer Value: iPhone 6


Value: Nordstrom’s


Value: Walmart


Customer Value: Soda Vending


Customer Value: Starbucks


Value: Implications

• 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


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

BUAD 307—MARKETING FUNDAMENTALS MARKETING OVERVIEW.

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