What is marketing?

  • No right or wrong answer
  • Organizational function: To fulfill customer’s needs by providing satisfied product, price, place, and promotion
  • Process: Social, managerial process, and benefiting both individual and groups needs/wants

Earlier eras of Marketing

  • Production orientation: If there are demands, I can sell the product to them if I make it
  • Product orientation: If I make a better product, I can sell it to them
  • Sales orientation: It is important to make a good product, but it is also important to reach out to possible buyers
  • FYI: Marketing myopia means ignoring buyers’ needs bur rather focusing on product itself too much

The marketing era

  • Marketing orientation: It is new idea of selling that the producer focusing on the benefits of clients/buyers
  • We are not selling X product, but rather we are fulfilling the needs of Y clients
  • Marketing = relationship management

The selling concept vs. the marketing concept

  • The selling concept: factory (starting point) – existing products (focus) – selling and promoting (means) – profits through sales volume (ends)
  • The marketing concept: Market (starting point) – customer needs (focus)  – integrated (means) marketing – profits through customer satisfaction (ends)

Relationship management/ Life Time Value (LTV) of customer

  • It is easier to keep the existing clients than getting new clients
  • It is important to focus on lifetime value because one mistake will hurt your brand such as credit card or car companies right away (social media, internet era)

Core-Marketing Concepts

  • Markets – needs, wants, and demands – marketing offers (products, services, and experiences) – values and satisfaction – exchange transactions, and relationship – Markets
  • Customer’s needs and wants will trigger their purchasing power which will eventually converted to demand
  • By marketing offers by each company, the company would like to fulfill customer’s needs
    • Maslow’s Need Hierarchy – After fulfill the bottom needs, people want to move on to upper needs (Starbucks primary fulfill physiological needs, but through marketing, it fulfills esteem needs àincrease of price)
      • Self-actualization needs – self-development and realization (Top of the pyramid)
      • Esteem needs – self-esteem, recognition, status
      • Social needs – sense of belonging, love
      • Safety needs – security, protection
      • Physiological needs – hunger, thirst

Creating value

  • Original cost of production is not important if you come up with the price that satisfies the value (creating value = price)
  • Form Utility: Putting together different component to create useful values for customers
  • Place Utility: Displaying your products on convenient places for customers
  • Time Utility: Helping customers to get your products on their convenient time (Vending machine)
  • Ownership Utility: Legal possession of certain assets (car lease or car renting)
  • Risk Reduction
  • Example: currency exchange at Airport is more expansive because time/place utility
  • Example: IKEA’s DIY products are cheaper because they do not provide form utility

 

Analyze through 5Cs and create values through 4Ps

 

  • Customer: include current and future customer à Target Customer
  • Company: Find out company’s capabilities, strength, weakness through SWOT analysis
  • Competitors: both immediate (nearby real estate agents) and non-immediate (Zillow) competitors
  • Collaborators: Channels, Distributors, Media
  • Context: Government regulation, laws, external economy forces à Environment

 

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