What is Marketing

What is Marketing? - Think differently - Problem with marketing when thinking academically and not just business: it is way too familiar, because we live in a consumer society, we are always surrounded and impacted, and take part in marketing - So we look at surface impact, symptoms rather than causes, over simplifies marketing, even though it is actually very complex - the Canadian marketing association defines marketing as “a set of business practise designed to plan for and present an organizations products or services in ways that build effective customer relationship’s - the American marketing association “an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders” What are our core concepts? Value : - The fundamental purpose of Marketing is to create value for the consumer and to capture value from the consumer. o Two things: Create and capture value for and from the consumer - From a consumer perspective, value describes the benefits or problem- solutions the consumer receives when they buy and use a product. o Need to be careful because we think of value to literally o The way we try to make their life better matters o Example:  car, a way to cover a distance more easily, but why don’t people take public transportation, it does the same thing, except, for some consumers, cars are not a way to get from point a to b, its also about how

and when they want to get, the core and value isn’t about getting from point a to b, its about the freedom of movement.  Fancy cars can also be a status symbol, an experience, it holds a different value Needs & Wants - Effective marketing requires not only recognizing consumer needs, but also understanding the different ways that consumers want to satisfy those needs. o We use needs and wants interchangeably, but we should not o Needs are broad, they are when we don’t have what we feel we need to have, we don’t satisfy needs in the same way o Wants are the specific choices that specific consumers make to satisfy the specific experiences - Satisfaction is a subjective evaluation on the part of the consumer of whether a particular choice met, exceeded, or fell short of their expectations o Needs are universal, the specific wants that consumers experience help us decide who to chase after o Satisfaction is more subjective, built on our expectations, if you spend a dollar on a spatula and it breaks after a month, you are still satisfied because you got what was expected of it, it was only a dollar - Demand describes when wants are backed up by a consumer’s buying power. Unable to satisfy everyone, marketers will often make the choice to go where demand is strongest. o Consumer demand is when wants are back up by buying power, a consumer is hungry, they want that, but people always wants lots of things, you need something to exchange o It is the consumer that has demand and can pay for it, they have something of value to trade, these are the people we chase after, with a high demand Markets  Target Markets - Markets is a big broad group, where people can go and get what they want - We expect to see positive favourable responses to our offer, because we are targeting people who mor likely want our offer (strongest demand) Exchange

“the aim oof marketing is to make selling unnecessary” – Peter Drucker How has Marketing changed? Production Orientation  Sales Orientation  Marketing Orientation  Value-Based Orientation - Sales: we success by manipulating and compelling the consumer to take the response we want them to have - Marketing: duckers idea, succeed by understanding consumer - Value based: where we are now, not understanding the consumer, btu we succeed by building a connection and relationship with a consumer Value - Based - A “Value-Based” orientation means an organization competes by offering the consumer greater value than their competitors can. But we need to remember, value isn’t just about bigger quantities or lower prices. - Doing this means a focus on creating and curating ongoing consumer relationships rather than racking up unique sales transactions. o Multiple exchanges with consumers - This means greater investments in Customer Relationship Management (CRM) efforts that should strengthen the connection between consumer and brand, increasing value and satisfaction. What are the benefits of CRM?

Better Consumer Intimacy (we invest in this because of the customer benefit) + Greater ‘Share- of- Wallet’ (financial measure, if we look at a consumers spending over a period of time in a category, what percentage of that spending goes to a specific product or brand) + Higher Consumer Lifetime Value. Value - Based - Consumer relationships are not just built on value, but also shared values. Consumers want to be in relationships with organizations that they believe care about the same things and act is socially positive ways. - This means an increased emphasis on Corporate Social Responsibility (CSR), Cause Marketing, and Societal Marketing Concepts - People, profit and planet = the triple bottom line What is a Marketing strategy? - According to Michael Porter, a marketing strategy describes “how a business is going to compete, what its goals should be, and what policies will be needed to carry out these goals." - What are the generic marketing strategies? o Market penetration, market development, product development, diversification

- Differentiation says we are unique and stand a part, different and special, and appeals better to consumer - Focus says not every market is a market that every organization will chase after, not always worth it, looking a niche ideas - Middle of the road, says the way we build a competitive advantage is being proficient in everything, have one strength, and several capabilities Treacy and Wieserma’s “Value Disciplines” for Competitive Advantages Operation Excellence + Product Leadership + Consumer Intimacy - Operational excellence how we function as an organization to create and deliver value is more efficient Customer excellence + operational excellence + product excellence + locational excellence What is a Marketing Plan? A Marketing Plan - A Marketing Plan is a kind of blueprint for how an organization will address their market situation, carry out effective marketing programs that achieve strategic objectives, and provide customers with value. o Add the end of the day, different sources describe marketing plans differently

Planning Phase  Implementation Phase  Control Phase “What do we want to do?  “How are we going to do it?”  “Did we do what we planned to do?” Mission - A Mission Statement is a broad description of an organization’s over- arching goals and the scope of activities it plans to undertake. o What is the big corporation about, and the smaller marketing plans o We need the mission, who we are and what were chasing after informs everything else o Missions statements can be present oriented, day to day, who are wew right now, functions in the market place Vision - Vision statements are broad, forward- looking, and motivational statements that point to the best possible version of an organization. o Vision statements are future oriented, inspirational, aspiration o About the corporations, and the business Objectives

6. Target market - The customer segment or group to whom the firm is interested in selling its products and services. 7. Exchange - The trade of things of value between the buyer and the seller so that each is better off as a result. 8. Marketing mix (four p’s) - Product, price, place, and promotion—the controllable set of activities that a firm uses to respond to the wants of its target markets. 9. Goods – items that can be physically touched 10. Services - Intangible customer benefits that are produced by people or machines and cannot be separated from the producer. 11. Ideas - Thoughts, opinions, philosophies, and intellectual concepts. 12. B2C (business to consumer) - The process in which businesses sell to consumers. 13. B2B (business to business) - T he process of selling merchandise or services from one business to another. 14. C2C (consumer to consumer) – the process on which consumers ell to other consumers 15. Social media - Content distributed through online and mobile technologies to facilitate interpersonal interactions. 16. Value - Reflects the relationship of benefits to costs, or what consumers get for what they give. 17. Value cocreation - Customers act as collaborators with a manufacturer or retailer to create the product or service. 18. Relational Orientation - A method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship. 19. Customer relation management (CRM) – A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm’s most valued customers. 20. Supply chain - The group of firms and set of techniques and approaches firms use to make and deliver a given set of goods and services. Building Value Build & maintain a loyal customer base Distinguish from competitors How do Tim Hortons & Starbucks do it? Strong brand, customer appeal Constantly need to protect the brand What is 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. o It involves thoughtful planning, and emphasizes ethical implication of any decision - Both transactions involved marketing: o As a buyer, you decide to spend time/money on services and merchandise o As a seller, you receive money - Firms develop a marketing plan o This specifics their marketing activities for a specific period of time o Components: how the product or service will be conceived or designed, how much it should cost, where and how it will be promoted, how it will get to the consumer Core Aspects of Marketing - Marketing helps create value - Marketing is about satisfying customer needs and wants - Marketing entails an exchange - Marketing require produce, price, place and promotion decisions - Marketing can be performed by both individuals and organizations - Marketing occurs in many settings Learning goal 1: Satisfying customer needs and wants - Need: basic necessities - Want: how to fulfill that need  shaped by knowledge, culture and personality - Needs and wants are fundamental to marketing success - Needs and wants must be backed by demand in order for marketing to be effective, demand is demonstrated by the willingness to act on the wants and needs - To understand a customers needs and wants, the company must first identify the customers, or market for the product/service - Market refers to the world of trade - Target markets are important, because marketing is expensive and needs to be done carefully, people are targeted based on their wants and wealth - Entails a marketing exchange - The exchange can occur between any two parties - Not simply a buyer and a seller exchanging money for a good or service

- Delivering value o All activities necessary to get the predict to the right customer when that customer wants it o Supply chain management is the field that examines these activities o Where would you find this product in the store - Marketing channels distribution strategy o How does a company get the product to the right customer when and where they want it?  marketing channels  Distribution intensity  Locations: retailers, online  Supply chain  Logistics 4. Promotion - Communicating value o The communication activities of marketing o Used to inform, persuade and remind potential buyers o Used to influence their opinions or elicit a response  Advertising  Sales promotion  Personal selling  Public relations  Direct marketing  Electronic media Practice Question: Promotion is ____________ by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response. A) smoke-and-mirrors B) coercion C) teasing D) communication Can be performed by both individuals and organizations B2B: wholesaling is often only business to business  B2C: all retailing is business to consumer selling  C2C: swap meets, EBay, yard sales, etc Social Media and Marketing - The use of digital tools to easily & quickly create & share content to foster dialogue, social relationships & personal identities.

Marketing impacts many stakeholders - Both profit and non-profit entities - Developing economies - Entire industries Learning goal 3 The Four orientations of marketing - Product orientation o Product-oriented companies focus on developing and distributing innovative products with little concern about whether the products best satisfy customers’ needs. - Sales orientation o View marketing as a selling function where companies try to sell as many of their products as possible rather than focus on making products consumers really want. - Market orientation o 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. o Customers make a decisions based on quality convenience, and price o Customer is king - Value based orientation o To compete successfully, firms focus on the triple bottom line:  People (consumer needs & wants)  Profits (long-term profitable relationships)  Planet (social and environmental responsibility) o Better than competitors o Value looks at what you get for what you give o Customers engage in creating the product o Customers value: speed, convenience, size, accuracy, price, cost, savings or user- friendliness Practice Question: What must firms do to become value driven? A) Share information, balance benefits and costs, and build customer relationships. B) Set low prices, put profit above service, and use effective marketing strategies. C) Make logistics a priority, expand globally, and always offer new goods and services. D) Keep a vigilant eye on the market-place, undercut competitors, and provide competitive salaries. How do firms become more value driven?

- Pervasive across supply chain - Makes life easier - Enriches society - Can be entrepreneurial Marketing expands firms global presence - Good are available to consumers from many countries from the far reaches of the globe - Must understand customers needs & wants - Segment-by-segment, region-by-region Marketing is Pervasive across channel members - Each step in the supply chain involves marketing - All members in the chain must ultimately focus on creating value for their customer and the end user consumer o Supply chain partners: suppliers, manufacturers, warehouses, stores, and transportation intermediaries - Raw material suppliers  manufacturer  distributor  customer Practice Question: Which of the following would NOT be considered part of a supply chain? A) consumer B) retailer C) manufacturer D) customer service representative Marketing can be Entrepreneurial - Though important to large firms, marketing is equally important to the success of small ventures—especially new ventures. Chapter 2 – Developing marketing Strategies and a Marketing Plan Learning Objectives:

1. Define a marketing strategy 2. LO2 Describe the elements of a marketing plan 3. LO3 Analyze a marketing situation using a SWOT analysis 4. Explain how a firm chooses what consumer group(s) to pursue with its marketing efforts 5. Outline the implementation of the marketing mix as a means to increase customer value 6. Describe how firms grow their businesses Definitions: 1. Marketing strategy - identifies a firm’s target market(s), marketing mix (the four Ps), and how it plans to build a sustainable advantage 2. Sustainable competitive advantage - Something the firm can persistently do better than its competitors that is not easily copied and thus can be maintained over a long period of time. 3. Customer excellence - Involves a focus on retaining loyal customers and excellent customer service. 4. Operational excellence - Involves a focus on efficient operations and excellent supply chain management 5. Product excellence - Involves a focus on achieving high-quality products and effective branding and positioning. 6. locational excellence - Involves a focus on a good physical location and Internet presence. 7. Planning phase - Where marketing executives and other top managers define the mission and objectives of the business, and evaluate the situation by assessing how various players, both inside and outside the organization, affect the firm’s potential for success. 8. Implementation phase - Where marketing managers identify and evaluate different opportunities by engaging in a process known as segmentation, targeting, and positioning. They then develop and implement the marketing mix by using the four Ps. 9. Control phase - The part of the strategic marketing planning process when managers evaluate the performance of the marketing strategy and take any necessary corrective actions. 10. Mission statement - A broad description of a firm’s objectives and the scope of activities it plans to undertake. Attempts to answer two main questions: 1) What type of business is it? 2) What does it need to do to accomplish its goals and objectives? 11. Situation analysis (SWOT) - The second step in a marketing plan; uses a SWOT analysis that assesses both the internal environment with regard to its s trengths and w eaknesses and the external environment in terms of its o pportunities and t hreats. 12. STP - The processes of segmentation, targeting, and positioning that firms use to identify and evaluate opportunities for increasing sales and profits.

- Brand disruption? Learning goal 1 What is a marketing strategy? - Marketing strategy: o a firm’s target market (s) o a related marketing mix –the four P’s and o the bases upon which the firm plans to build a sustainable competitive advantage  Leads to sustainable competitive advantage! Sustainable competitive advantage - an advantage that cannot easily be copied and acts as a wall from competitors Nike – just do it! - Strong brand - Technology - Strong customer base - Loyal customers Discussion Question: Why have these factors been the keys to Nike’s sustainable advantage? Are there other factors to consider? Practice Question: What is sustainable competitive advantage? A) A broad description of the firms objectives and scope of its activities. B) Tool used to evaluate marketing performance. C) Something the firm can consistently do better than its competitors. D) Written document that discusses competitor strengths and weaknesses, and the firms advantages over them. Developing Customer Value - Macro Strategies for Developing customer value o Customer excellence o Operational excellence o Product excellence o Locational excellence 1. Customer Excellence

- Retain loyal customers through value based strategies o Strong brand o Unique merchandise o Superior customer service - Methods to build customer loyalty o Create an emotional attachment through loyalty programs - Provide excellent customer service o Greeting customers 2. Operational Excellence - Efficient operations  excellent supply chain management  strong supplier relationships o Provide customers merchandise they want, when they want it, in required quantities, at lower delivered cost than competitors - Firms with string relationships may gain exclusive rights to: o Sell merchandise in a particular region o Obtain special terms of purchase that are most available to competitors o Receive popular merchandise that may be in short supply 3. Product Excellence - High perceived value + effective branding and positioning 4. Locational Excellence - The three most important things in retailing are location, location, location o Starbucks o Time Hortons - Tims and Starbucks have a high density of locations it is difficult for competitors to enter the market Multiple Source of Advantage - Multiple approaches: o Customer value o Customer service o Customer relations o Great prices - Good service = good value Practice Questions: