Chapter 1 Marketing Today & Tomorrow

1. Marketing Chapter 1 Marketing Today & Tomorrow

2. What is Marketing? Marketing is 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. (AMA 2009) (FYI – Who are “stakeholders?”) Marketing is the creation and maintenance of satisfying exchange relationships. Marketing is the key tool in matching supply and demand. Frameworks 2.1

3. Why study Marketing? • Marketing takes place all around you – advertising, transportation, research. • All businesses & organizations are involved in marketing. • When you make a purchase you are involved in marketing. • An understanding of marketing will make you a better consumer, a better employee, a better leader, and lead to better career opportunities. • How businesses use marketing to increase their effectiveness and profits. Frameworks 2.2

4. How does Marketing benefit you? • Bridges the gap between you and the maker or seller of an item. (You don’t have to travel to factories or farms to buy products.) • Makes buying easy for customers. (Large selection of products under one roof, convenient locations, and hours of operation.) • Creates a variety of new and improved products. (Competition forces businesses to sell more and better products.) • Reduces prices. (Effective marketing sells more products which reduces the per unit cost of each item.) Frameworks 2.1

5. Why is Marketing important? • To be successful in business requires being marketing oriented. • Every business/organization in the U.S. is involved in marketing. • Over 4 million businesses have marketing as their primary activity – auto dealers, real estate agents, insurance agents, travel agencies, banks, and all retailers. • Millions of other businesses use marketing in limited roles – attorneys, physicians, accounting firms, government agencies, colleges and universities, and construction companies. Frameworks 2.2.2

6. What can be Marketed? • Products – goods or services. • Non-profit organizations – military branches, churches, charities, libraries, schools, or colleges. • Places or destinations – States, countries, or cities. • Events – launch of a new product, concert, festival, fair, grand opening, or special service. • Ideas – anti-smoking campaigns, recycling programs, safety awareness, anti-drug campaigns • Individuals – politicians, artists, sports stars, or other celebrities. Frameworks 2.2.1

7. Non-Profit Organization Marketing Frameworks 2.2.1

8. http://www.nationalguard.com/citizensoldier/index.php

9. Non-Profit Organization Marketing Frameworks 2.2.1

10. Place Marketing Frameworks 2.2.1

11. Place Marketing http://www.harrison-chamber.com/

13. Event Marketing

14. Marketing of Ideas (cause marketing) Frameworks 2.2.1

15. Marketing of Ideas (cause marketing) Frameworks 2.2.1

16. Marketing of Ideas (cause marketing)

17. Marketing of People/Politicians Frameworks 2.2.1

18. Marketing of Celebrities Celebrities are constantly engaged in marketing. They often market themselves and the movies they star in. Frameworks 2.2.1

19. Marketing of Dead Celebrities Video Presentation: Can you really use marketing with dead celebrities? Frameworks 2.2.1

20. Marketing of Sports Celebrities

21. Video Presentation Is LeBron James a person or a brand? Steve Kroft profiles Cavalier's superstar, LeBron James, who at only 24, is already among an elite handful of athletes who command tens of millions a year in playing and marketing fees.

22. The Marketing Functions • Market Planning - identifying and understanding markets. • Product & Service Management – design and development of products/services that will satisfy customer needs. • Distribution – getting products/services to customers. Includes determining the best procedure to be used so prospective customers can locate a product. • Pricing – establishing the value of products/services. • Promotion – communicating information to customers to inform, persuade, or remind them about a company or its products. • Selling – direct, personal, and persuasive communication with customers. • Market-Information Management – obtaining, managing, and using market and customer information. • Financing – budgeting for the business and providing financial assistance to customers. • Risk Management – providing security for products, buildings, equipment, inventory, employees, and customers.

23. The Need for Marketing • Good products will not be successful without good marketing. • Customers will not buy good products they’ve never heard of, can’t find, can’t afford, don’t understand, don’t know they need, or simply don’t want! • Marketing activities must be carefully planned and coordinated with other business activities.

24. The Need for Marketing "If a man can write a better book, preach a better sermon, or make a better mousetrap, than his neighbor, though he build his house in the woods, the world will make a beaten path to his door." - Ralph Waldo Emerson Often misquoted as: "Build a better mousetrap and the world will beat a path to your door." 1803 – 1882 American philosopher and poet.

25. Which is the better mousetrap? The product must be what the customer wants! But there are some things that customers just will not buy!

26. The Development of Marketing in Business • Today, no person or country is self-sufficient. We all rely on other people for things we need and want. • To be self-sufficient people would have to over-come the need for a variety of goods and services.

27. The Development of Marketing in Business Bartering, exchanging products/services with others by agreeing on their value, without using money, was used before the development of a money system.

28. Bartering Booms During Economic Tough TimesBy Emily Bazar, USA TODAY Even though Ron Giesler, 42, lost his job wiring oil rigs three weeks ago, the Seabrook, Texas, resident is still working as an electrician. He's just getting paid in trade: laptops, computer parts and other used goods. When Christine Rietsch, 41, of Fridley, Minn., had her hours cut, she got creative so her two children could have a merry Christmas. She drew a portrait of a man's wife and son and received the Guitar Hero video game in return. Giesler and Rietsch are among a growing number of people turning to bartering to help them survive the recession. In barter, people trade goods and services without exchanging money. Barter "absolutely thrives in bad times," says Roger Staiger, a professor at Johns Hopkins University's business school. Last month, a Denver developer asked Staiger for help restructuring a loan. Lacking cash, he gave Staiger a Colorado ski trip, and the developer's wife is designing his Web page. "This is part of the underground economy that does not contribute to the GDP (gross domestic product), but it absolutely contributes to helping people and fostering trade," he says.

29. Bartering Booms During Economic Tough TimesBy Emily Bazar, USA TODAY Giesler and Rietsch both use Craigslist. Giesler has done six barters with homeowners who need electrical work. He sold a laptop he received to help with the mortgage. Rietsch, a nurse, has done a variety of trades, such as trading a table for a chair. "If you're able to give somebody a service or good they're looking for, it saves both of you money that can go towards bills or food or gasoline," she says. On Craigslist, postings in the bartering section were up 100% between July 2008 and July 2009, says spokeswoman Susan MacTavish Best. "Bartering is particularly popular in areas that have been hit with foreclosures," she says. U-Exchange.com, a website that connects people who want to swap and trade, had nearly 1.1 million page views between mid-January and mid-February, says John Moore, founder of the site. During the same period last year, there were almost 362,000. Businesses also barter. The Gulf Coast Trade Exchange has 500 members from Gulf Shores, Ala., to Destin, Fla., who earn credit for providing goods and services to each other. “We have been getting lots of calls," says owner Fran Crumpton. "People are more concerned about the bottom line and their future."

30. The Development of Marketing in Business • Currency was developed as a medium of exchange to make buying and selling easier, and because people began to specialize in performing certain jobs.

31. The Development of Marketing in Business • How valuable is gold today? VIDEO

32. Video Presentation The U.S. Monetary System The U.S. Mint is in a bind: should it continue to produce pennies and nickels whose metal content is worth more than their face value? Morley Safer reports.

33. The Development of Marketing in Business • With this specialization of labor, people made more products and had more money. This created a need for central markets.

34. Central Markets were located where people frequently traveled or gathered. The Forum was the central marketplace and business center of ancient Rome. Visitors went here to do their banking, trading, and shopping. Elaborate temples and public buildings were also a part of the Forum. Frameworks 2.1

35. The Mall of America Bloomington, Minnesota Cost to build - $650 million Store front footage - 4.3 miles 4.2 million square feet Employees 13,000 Parking spaces - 12,550 Attractions The Park at MOA Underwater Adventures Aquarium LEGO Imagination Center Dinosaur Walk Museum A.C.E.S. Flight Simulation

36. More than 520 stores Sit-down restaurants - 20 Fast food restaurants - 30 Specialty food stores - 36 Movie screens – 14 Wedding Chapels - 1

37. The Branson Landing

38. The Functions of Business • Production – Obtains or creates products or services for sale. • Operations – Support the primary function of the business and keep the business operating efficiently. Buildings and equipment must be maintained. Products must be obtained, transported, and stored. Paperwork and computerized records must be prepared and obtained. • Accounting & Finance – Planning and managing the resources and records of a business. • Management – Developing, implementing, and evaluating the plans and activities of a business. • Marketing – All business must communicate with customers and make their products/services available to ensure satisfying exchanges.

39. The Functions of Business Production – forms of production: • Processing raw materials into something useful – oil refineries and paper mills. • Agriculture – Growing food for consumption. • Manufacturing – Automobiles and computers are manufactured. • Services – Preparing a tax return, seeing a doctor, dentist, or getting a hair cut. • Merchandising – Buying an assortment of products (made by others) for resale to consumers. Examples include retailers and wholesalers.

40. Coordination of Business Functions • Each of the functions of an effective business depends on the other functions. • Products can be produced, but if the company is not operated or managed well, adequate records are not maintained, or marketing is ineffective, the products will not be sold at a profit.

41. Understanding the Marketing Concept • The Marketing Concept is using the needs of customers as the primary focus during the planning, production, pricing, distribution, and promotion of a product or service. • The Marketing Concept is a company wide consumer orientation. Frameworks 2.4

42. Implementing the Marketing Concept Identify needs of customers Develop and market products or services Operate a business profitably Frameworks 2.4.1

43. Getting the Word Out – Page 20 • After The Sale Follow-up. Making contact with the customer after the sale with a letter, phone call, or e-mail. • Recognition And Special Services. Recognizing purchasers in promotions, newsletters, or at events. • Incentives. Offering purchasers financial incentives or discounts for recommending the business to prospective customers. • Buzz Marketing. (AKA – Viral Marketing) Using high profile entertainment or news to get people to talk about their brand. • Product Seeding. Placing the right product in the right hands at the right time and providing information or samples to influential individuals. • Conversation Creation. (AKA – Viral Marketing) Developing interest or fun advertising, e-mails, catch phrases, entertainment, or promotions designed to start word of mouth activity.

44. Viral Marketing Marketing that facilitates and encourages people to pass along a marketing message. Viral marketing depends on a high pass-along rate from person to person. If a large percentage of recipients forward something to a large number of friends, the overall growth snowballs very quickly. If the pass-along numbers get too low, the overall growth quickly fizzles. A lot like “word-of-mouth.”

45. Product Seeding At last year's Academy Awards, for example, one of two Best Actress gift-bags featured Gucci sunglasses, a Sprint PCS phone, Christian Tse 18-carat gold Iris earrings, and more. The Best Actor bag featured Gucci eyewear, a Maurice Lacroix Swiss watch and assorted other goodies. According to news reports, the retail value of one such group of bags at the Oscars exceeded $110,000 each! Jessica Alba wearing free Gucci sunglasses

46. Product Seeding Energy Brands, makers of the Glaceau Vitamin Water line, discovered product seeding in 2004. As a result of its long-time strategy to "home deliver" the vitamin-enhanced drink to celebrities (including Sean "Puffy" Combs and Tom Cruise), the company gained a fan in 50 Cent. Having mentioned his preference for the product in a series of interviews, the Hip Hop star - who is well known for his fitness-centered lifestyle - became an obvious choice for brand spokesperson. Jennifer Aniston with her “seeded” bottle of water.

47. Guerrilla Marketing achieving conventional goals, such as profits … with unconventional methods, such as investing energy instead of money.

48. Guerrilla Marketing Sean Stevens (left) and Peter Berdovsky found something amusing during their arraignment inside Charlestown District Court. Months later, Berdovsky (left) and Stevens showed much more remorse, acknowledged their roles, and apologized.

49. Guerrilla Marketing