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Marketing 101 Ivy Tech M01
Terms in this set (35)
What is marketing?
Marketing is a set of activities related to creating, communicating, delivering, and exchanging offerings that have value for others. In business, the function of marketing is to bring value to customers, whom the business seeks to identify, satisfy, and retain.
The Art of the Exchange
In marketing, the act of obtaining a desired object from someone by offering something of value in return is called the exchange process. The exchange involves:
•the customer (or buyer): a person or organization with a want or need who is willing to give money or some other personal resource to address this need
•the product: a physical good, a service, experience or idea designed to fill the customer's want or need
•the provider (or seller): the company or organization offering a need-satisfying thing, which may be a product, service, experience or idea
•the transaction: the terms around which both parties agree to trade value-for-value (most often, money for product)
Individuals on both sides try to maximize rewards and minimize costs in their transactions, in order to gain the most profitable outcomes. Ideally, everyone achieves a satisfactory level of reward.
the role of marketing
identify, satisfy, and retain customers.
a want or need that you can address, as well as the prospective customers who possess this want or need.
customers by delivering a product or service that addresses these needs at the time customers want it. Key to customer satisfaction is making sure everyone feels they benefit from the exchange. Your customer is happy with the value they get for what they pay. You are happy with the payment you receive in exchange for what you provide.
customers by creating new opportunities to win customer loyalty and business.
Marketing vs. Advertising
Advertising uses paid notices in different forms of media to draw public attention to a company, product, or message, usually for the purpose of selling products or services. While advertising is a common and useful tool for marketing, it's just one of many tactics marketers may use to achieve their goals.
Marketing vs. Branding
Branding is the process of "creating a unique name and image for a product in the consumer's mind."  Brand is a powerful tool for shaping perceptions about a company or product in order to attract and retain loyal customers. Marketing processes and activities build brands, and branding is an important strategic consideration in any marketing effort. At the same time, marketing refers to a broader scope of activity than just branding.
Marketing vs. Sales
Sales refers to the process of actually selling products or services, leading up to the point where the exchange of value takes place. Effective marketing aligns well with the sales process and leads to increased sales. While marketing and sales are intertwined, the scope of marketing is generally considered broader than just supporting sales. Marketing helps identify prospective customers and prepare them to enter the sales process as informed, receptive, qualified sales leads.
The Marketing Concept
takes steps to know as much about the consumer as possible, coupled with a decision to base marketing, product, and even strategy decisions on this information. These organizations start with the customers' needs and work backward from there to create value, rather than starting with some other factor like production capacity or an innovative invention. They operate on the assumption that success depends on doing better than competitors at understanding, creating, delivering, and communicating value to their target customers.
The Product Concept
product orientation, in which the primary organizational focus is technology and innovation. All parts of these organizations invest heavily in building and showcasing impressive features and product advances, which are the areas in which these companies prefer to compete. This approach is also known as the product concept. Rather than focusing on a deep understanding of customer needs, these companies assume that a technically superior or less expensive product will sell itself. While this approach can be very profitable, there is a high risk of losing touch with what customers actually want. This leaves product-oriented companies vulnerable to more customer-oriented competitors.
The Sales Concept
sales orientation. These businesses emphasize the sales process and try to make it as effective as possible. While companies in any industry may adopt the sales concept, multilevel-marketing companies such as Herbalife and Amway generally fall into this category. Many business-to-business companies with dedicated sales teams also fit this profile. These organizations assume that a good salesperson with the right tools and incentives is capable of selling almost anything. Sales and marketing techniques include aggressive sales methods, promotions, and other activities that support the sale. Often, this focus on the selling process may ignore the customer or view the customer as someone to be manipulated. These companies sell what they make, which isn't necessarily what customers want.
The Production Concept
The production concept is followed by organizations that are striving for low-production costs, highly efficient processes, and mass distribution (which enables them to deliver low-cost goods at the best price). This approach came into popularity during the Industrial Revolution of the late 1800s, when businesses were beginning to exploit opportunities associated with automation and mass production. Production-oriented companies assume that customers care most about low-cost products being readily available and less about specific product features. Henry Ford's success with the groundbreaking assembly-line-built Model T is a classic example of the production concept in action. Today this approach is still widely successful in developing countries seeking economic gains in the manufacturing sector.
three-step process-product features, production, and sales
1.continuously collect information about customers' needs and competitors' capabilities;
2.share the information across departments; and
3.use the information to create a competitive advantage by increasing value for customers.
identify, satisfy, and retain their customers
These three activities lay the groundwork for what has become a strategic imperative in modern marketing: customer relationship management. Technology-As a result, there are more tools now than ever before to help companies create, maintain, and manage customer relationships.
Customer lifetime value
predicts how much profit is associated with a customer during the course of their lifetime relationship with a company.
The three relationship stages
Meeting and getting aquainted, Providing a Satisfying Experience, Sustain a Committed Relationship
Meeting and Getting Acquainted
•Find desirable target customers, including those likely to deliver a high customer lifetime value
•Understand what these customers want
•Build awareness and demand for what you offer
•Capture new business
Providing a Satisfying Experience
•Measure and improve customer satisfaction
•Track how customers' needs and wants evolve
•Develop customer confidence, trust, and goodwill
•Demonstrate and communicate competitive advantage
•Monitor and counter competitive forces
Sustain a Committed Relationship
•Convert contacts into loyal repeat customers, rather than one-time customers
•Anticipate and respond to evolving needs
•Deepen relationships, expand reach of and reliance on what you offer
Another benefit of effective customer relationship management is that
it reduces the cost of business and increases profitability. As a rule, winning a new customer's business takes significantly more time, effort, and marketing resources than it does to renew or expand business with an existing customer.
the practice of reaching out to customers and encouraging them to become full participants in marketing activity and the growth of a brand. Sometimes called "live marketing," this approach is becoming more common as media and technology provide more interactive, visible, and sharable ways for consumers to connect with brands and companies.
For-Profit Marketing Versus Nonprofit Marketing
For-profit organizations are typically privately owned or publicly traded companies with a primary purpose of earning money for their owners. Nonprofit organizations also earn money, but their primary purpose is to use these funds for a specific charitable purpose. Types of nonprofit organizations that may engage in marketing include schools and colleges, hospitals, museums, charitable organizations, and churches, among others.
Nonprofit institutions exist to benefit a stated mission or purpose, regardless of whether profits are achieved. Owing to their socially beneficial purpose, nonprofit organizations are subject to an entirely different set of laws—notably tax laws. While they are allowed to generate profits, they must use these funds in specific, philanthropic ways in order to maintain their nonprofit status. Marketing efforts focus on activities that promote the organization's mission. A school, college, or university might use marketing to attract students, improve academic reputation, and solicit donations from alumni. A museum or nonprofit theater company uses marketing to attract visitors, ticket sales, event sponsors, and philanthropic donations. Marketing for nonprofit hospitals usually focuses on attracting patients and strengthening reputation as a high quality health care provider.
Business-to-business (B2B) marketers
sell to other businesses or institutions that consume the product as part of operating the business, or use the product in the assembly of the final product they sell to consumers.
Business-to-consumer (B2C) marketers
focus their efforts on consumers, the individuals who consume a finished product.
Nick purchased a book store gift card for his sister Agatha's birthday. Agatha takes the gift card and purchases a book she's wanted to get. Agatha is a:
Joe receives a new hat for his birthday from his friend Nate. In this example Nate is a:
Marketing Can Benefit Organizations
Marketing helps businesses know which problems to solve and which products, services, and experiences to offer. Effective marketing drives product improvements and determines the terms of profitable transactions. Marketing efforts help organizations build and sustain productive relationships with the people and groups they serve. Without effective marketing, companies become islands that retain no meaningful connection to their customers. When an organization loses its audience, eventually it ceases to exist.
Marketing Can Benefit People
Individuals are not just targets of marketing; they can also be beneficiaries. Marketing helps people navigate the world around them to find the things that address their wants and needs. Marketing is responsible for the creation of products that delight people, improve their productivity, and alter their quality of life. In recent years, marketing has contributed to the pervasive information now available to help people make advantageous consumer choices. Marketing reduces the friction and hassle around transactions. Imagine, without marketing you would never know that many of the products you need exist, let alone how to find them.
Marketing and Society
However, effective marketing helps create the conditions for healthy competition and market efficiency, where companies and consumers communicate and exchange mutual value.
A place where consumers and organizations connect, build relationships, and bring to market unique solutions to problems or needs is Indiegogo. What type of societal benefit does its marketing awareness bring?
creates products that satisfies and delights people
Your coworker Zander is looking for a product that helps him plan and record his year effectively. He wants it to also tie in his overall goals with yearly goals. You remember seeing a social media post about a planner by FranklinCovey that meets all of Zander's criteria. You tell Zander and he buys the planner. You just experienced how marketing can:
Highlight solutions to problems
When marketing is effective a company receives the benefit of:
Product or service improvements
The role of marketing