Introduction to Marketing and Market-Based …

1 Introduction to Marketing and Market-Based Management Dr. Roger J. Best This chapter provides an overview of basic Marketing concepts for those new to Marketing . ! ! This knowledge base will provide a foundation for the concepts presented in Market-Based Management, 6th edition.! Introduc2on$to$Marke2ng$and$MarketOBased $Management$$$3). THE Marketing EXCHANGE PROCESS! FIGURE) ))))CUSTOMER)ORIENTATION$. Ask$most$people$for$a$de ni2on$of$. marke2ng$and$they$will$talk$about$. )))))Customer)Experience))) )))CUSTOMER)). adver2sing.$However,$adver2sing$is$ ))PRODUCER). )))))))FOCUS).

2 One$small$part$of$the$marke2ng$ )Product) )Product) ). ))Product)) RESELLERS). exchange$process.$$ ))Features) ))Availability) ))Needs). $ )) ) ))Wants). ))Branding). At$the$$most$basic$level,$marke2ng$is$ ))Behaviors). ))Cost) )Money) ))Services) Money). ))Demographics). an$exchange$rela2onship$between$ ))Price). ))Lifestyles). producers$and$consumers$ $one$ Customer) ). where$producers$and$consumers$ )) :))We)strive)to)produce)products)that)cu stomers)need/want.). exchange$value$(1).$Producers$provide$. a$product,$service$or$poli2cal$promise$ Customer) )$. to$consumers$in$exchange$for$money$ A$business$with$a$customer$orienta2on$ta rgets$speci c$.

3 Or$other$compensa2on,$such$a$ customers$based$on$their$wants,$needs,$a nd$use$behaviors.$An$. dona2on$to$a$nonpro t$organiza2on$ important$part$of$this$process$is$the$de tailed$understanding$of$. or$your$vote$for$poli2cal$candidate.$$ target$customers or,$in$other$words,$the$voice$of$the$. For$example,$consumers$exchange$money$fo r$a$car$that$o ers$desired$ customer.$Furthermore,$a$business$with$a $customer$orienta2on$. bene ts,$as$illustrated$in$Figure$ $In$this$case$Prius$car$consumers$ develops$rela2onships$with$target$custom ers$and$maintains$. exchange$money$for$a$car$that$promises$c ertain$customer$bene ts$ conversa2ons$with$them.

4 $Based$on$this$understanding$of$. through$a$reseller$that$facilitates$the$ marke2ng$ $This$ customer$needs,$producers$formulate$prod ucts$with$bene ts$. marke2ng$exchange$process$can$take$on$th ree$di erent$marke2ng$ and$features$at$a$price$that$is$aNrac2ve $to$customers.$$. $. exchange$orienta2ons$(2):$$. $. A$strong$customer$focus$also$allows$a$cu stomerOoriented$. Customer) ) $What$customers$need.$ business$to$understand$their$experience$ in$using$the$business'$. Sales) ) $What$we$have$to$sell.$ products$and$the$associated$levels$of$cu stomer$sa2sfac2on.$The$. ) ) $What$we$produce.

5 $ ul2mate$goal$is$con2nuous$improvement$of $products$that$. beNer$meet$the$needs$of$target$customers .$The$key$. FIGURE) :))THE) Marketing )EXCHANGE)PROCESS) components$of$a$customer$orienta2on$are$ presented$in$dark$. blue$in$Figure$ $. PRODUCERS) )RESELLERS) )))CONSUMERS) $. Product) Product) The$marke2ng$process$for$the$Prius$is$a$ good$example$of$strong$. customer$orienta2on.$This$process$is$foc used$around$the$voice$. of$the$customer,$the$customer$experience ,$and$the$desired$. )Money) )Money) balance$of$price$and$performance.$Custom er$needs,$wants,$. $$. Introduc2on$to$Marke2ng$and$MarketOBased $Management$$5).

6 FIGURE) :)PRIUS)OWNER)DEMOGRPAHICS)AND)LIFESTYLE S$ FIGURE) :)SALES)ORIENTATION$. A"common"misconcep+on"is"that"Prius"buye rs"are"young"and"trendy."". $ )))PRODUCERS). )))))RERSELLERS) ))))CONSUMERS). ) )Product) )Product). In$reality,$Prius$drivers$are$older$than $the$ ))Sales) )). average$car$buyer$and$have$higher$ ))Product)) )Demographics). )) ). ))Features) )Shopping)Habits). incomes.$Over$70$percent$of$Prius$driver s$ ))Availability). ))Branding) )Money) Money) )Media)Habits). have$incomes$over$$100,000,$higher$ ))Cost) ). levels$of$educa2on,$and$have$a$dis2nc2ve $ ))Price) )).

7 Lifestyle$as$outlined$below$in$the$Prius $. Customer$Pro le.$ :)We)strive)to)convince)customers)to)wan t)what)we)produce.). $ $ $. Prius$owners$are$also$more$likely$to$con sume$organic$food,$yogurt,$and$. behaviors$and$media$habits,$as$shown$in$ Figure$ $They$may$. decaf$co ee$and$are$more$likely$to$enjoy$hiking$a nd$prac2ce$yoga.$They$are$. predominately$Democrats$(38%)$and$Indepe ndents$(34%).$ have$an$idea$who$buys$their$product,$but $likely$do$not$know$why.$. As$a$result,$these$businesses$are$at$ris k$of$losing$consumers$to$. and$desired$experience$drove$product$des ign,$pricing,$distribu2on$and$ compe2tors$that$o er$a$beNer$combina2on$of$product$.

8 Adver2sing.$These$factors$included$lifes tyle,$ac2vi2es,$interests$and$ performance$and$price.$$. $. beliefs as$well$as$age,$income,$educa2on,$loca2o n,$household,$and$. ) )$. other$demographics.$$. A$business$with$a$produc2on$orienta2on$p roduces$what$they$are$. $. good$at$and$distribute$the$product$for$i nterested$consumers$to$. One$of$the$major$advantages$of$a$custome r$orienta2on$is$an$in2mate$. purchase.$This$orienta2on$is$common$when $there$is$limited$. understanding$of$target$customers.$This$ allowed$the$Prius$productO. supply$and$few$compe2tors.$There$is$liNl e$or$no$e ort$to$underO$.

9 Marke2ng$team$to$avoid$personal$assump2o ns$about$poten2al$. stand$customers$and$customer$needs.$This $was$true$for$early$. customers,$as$illustrated$in$Figure$ $In$actuality,$Prius$customers$. produc2on$of$automobiles,$radios,$TVs,$p ersonal$computers$and$. are$older$than$the$average$car$buyer$wit h$higher$incomes$and$higher$. many$other$products.$As$these$markets$ev olved$with$more$. levels$of$educa2on$(3).$Their$needs$go$b eyond$the$need$for$fuel$. compe2tors$and$products$that$beNer$met$c ustomer$needs,$these$. e ciency,$and$include$environmental$impact $and$a$driving$experience$.

10 That$ ts$their$lifeO$style$and$usage.$$ FIGURE) :))PRODUCTION)ORIENTATION$. $. Sales) )$ PRODUCERS) CONSUMERS). Many$companies$operate$with$a$sales$orie nta2on.$These$are$ ))Product)) )Product) ))RESELLERS) Product). businesses$that$are$focused$on$convincin g$consumers$to$want$ ))Features) ))Sales). whatever$they$manufacture.$These$product s$may$or$may$not$match$ ))Branding) Money) )Availability) Money). ))Cost) ))Services). buyer$needs$for$desired$product$bene ts,$features$and$price.$ ))Price). Businesses$with$a$sales$orienta2on$rely$ on$channel$sales$and$. adver2sing$to$sell$their$products$to$con sumers$with$certain$ :))We)sell)what)we)are)good)at)producing .