MKT 304 Principles of Marketing

Lecture 1

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Welcome to Marketing!

Professor: Dr. Freddy Lee

, Tel:

Course Web-site:http://www.mgmt120.cjb.net

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SchedulesClass Meeting: Section 1: MD 2.30-4.10PM

5: M 6.10PM- 10PM

Office Hours: M, D 1-2.15pm

or by appointment.

Course Materials:Essentials of Marketing, 10th edition, (Perreault, and McCarthy, 2005)

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Instruction and Evaluation• Instruction

Lectures/discussions, in-class exercises & case studies

• Evaluation (Final Grade based on curve)

40%Final examination

20%Mid-term examination

10%Participation

15%Case report 2 (group)

15%Case report 1 (group)

PercentComponent

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Why Study Marketing?

Costs & Opportunity

About 50% of Total Product Costs are Marketing Costs

CareersAbout 25 to 33% of

Work Force hold Marketing Positions

Marketing

Contributions to Firm

Individual Contributions

Critical to Success of Firm

Contributions to Society

Individual Contributions have

Societal Effects

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Marketing: It Can Be More Than Products ... WE’VE ALL HEARD ABOUT THE PLIGHTOF ENDANGERED SPECIES LIKE THE BALDEAGLE, AFRICAN ELEPHANT, AMERICAN

Sooner or Lateryou’ll come across

an endangered speciesyou care about.

CROCODILE AND POLAR BEAR. BUT WITH MOUNTING ENVIRONMENTAL DAMAGE FROMSUCH THINGS AS OIL SPILLS,ACID RAIN DESTRUCTION OF THE RAIN FORESTS, CARELESS WASTE DISPOSAL AND HOLES INTHE OZONE LAYER, ANOTHER SPECIES ISIN DANGER. THE ONLY SPECIES THAT CANDO SOMETHING TO STOP IT. TO HELP ESTABLISH SCHOLARSHIPS FOR ENVIRO EDUCATION, PLEASE SEND A DONATION TOTHE ENVIRO CHALLENGE FUND,RADIO CITY STATION, PO BOX 1138, NY 10101-1138.

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Marketing: It Can Be Simplistically Elegant ...

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Marketing: It Can Be Pointed ...

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Marketing: It can be innovative

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Marketing: It can be FUN

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So… what exactly is marketing??

• Tell me what you think• Let’s check it out

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What is Marketing?• A Definition of Marketing

Marketing is the process of planning and executing conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.

- by AMA (American Marketing Association)

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Micro vs Macro Marketing

• Micro-Marketing– The performance of activities that seek to accomplish an organization’s

objectives by anticipating customer or client needs and directing a flow of need satisfying goods and services from producer to customer or client.

– @ the firm level

• Macro-Marketing– A social process that directs an economy’s flow of goods and services

from producers to consumers in a way that effectively matches supply with demand and accomplishes the objectives of society

– @ the society level

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Customer Needs and Wants• Needs

– A state of deprivation of some basic satisfaction; – e.g., safety, esteem, food, clothing.

• Wants– Desires for specific satisfiers of needs;– e.g., hamburger and Coke for needs of food.

• Focus on customer needs!• Firms who concentrate their thinking on the

physical product instead of customer needs are said to suffer from marketing myopia.

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Products and Utility

Form

Task

Time

Place

Possession

Provided by Production Provided by Marketing

Utility=Value from

Satisfying Needs

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In Fact, Micro Marketing Is …

• More than selling and advertising;

• Begins with customer needs;

• Customer satisfaction is number one!

• Starts earlier than production, and lasts later than sales;

• Marketing does not do it alone.Marketing Orientation aims at carrying out the marketing concept.

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Production versus MarketingOrientation

Starting point Focus Means Ends

Production Orientation

MarketingOrientation

Factory

Market

Existing Easy ToProduceProducts

Customer needs

Selling andpromotion

Integratedmarketing

Profits viasales volume

Profits viaCustomer satis-faction

“The goal of marketing is to own the market, not just to sell the product.” - Regis McKenna, Harvard Business Review (1991)

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Production versus MarketingOrientation

Internal External

WarehouseShippingFinancePersonnelPurchasing

SalesAdvertisingSales Promo

ProductionAccountingR&D

All departments work together to provideCustomer satisfaction

Each department work to achieveDepartmental goals

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Emphasis on Whole System

KeyCharacteristics

KeyCharacteristics

Every Economy Needs It

Every Economy Needs It

Focus on a Society’s

Objectives

Emphasis on Whole SystemEmphasis on

Whole SystemEvery Economy

Needs It

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Macro-Marketing

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Macro Marketing Example

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A Central Market

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Pure Subsistence Economy

Marketing Involves Exchange!Marketing Involves Exchange!

All Economies Need Macro-Marketing Systems

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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Central Markets Help Exchange

Ten exchanges required without central market

Pots

Baskets

KnivesHoes

Hats

Only five exchanges are required when a middleman (intermediary) in a central market is used

CentralMarket

Middleman

Exhibit 1-2

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More Growth = More Global Trade

More Growth = More Global Trade

Tariffs and Quotas Control Flows

Tariffs and Quotas Control Flows

International CountertradeInternational Countertrade

Increased Global TradeIncreased

Global Trade

More Growth = More Global Trade

More Growth = More Global Trade

Tariffs and Quotas Control Flows

Tariffs and Quotas Control Flows

International CountertradeInternational Countertrade

Increased Global TradeIncreased

Global Trade

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

WTO Develops

Rules

WTO Develops

Rules

Nations’ Macro-Marketing Systems Are Connected

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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

TransportFirms

ISP's

ProductTestingFirms

Ad Agencies

ResearchFirms Consumers

Producers Wholesalers Retailers

OtherSpecialists

Who Performs Marketing Functions?

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Other Concepts

• Customer Value and Relationship– Value= Perceived benefits – costs of benefits– Retaining a customer is cheaper and the firm should work together to

provide customer value before and after each purchase– Customer satisfaction is the way to loyalty

• Non Profit Organization and Marketing– Compete for the same resources but for different goals – NOT FOR

PROFIT

• Social Responsibility and Ethics– Gas Guzzlers– Full Disclosure vs ambiguous information

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Non Profit Marketing

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Next Time• Read Chapter 2, read Harley Davidson • Lecture and Learning Aid on course website• REGISTER for the Discussion forum on course website– make

contacts• Try the online study guide, try the MCQ quiz• Talk with your classmates to form groups

– 5 people each group;– Try to assemble a diversified group– Individual ‘one-person show’ is ok as well

• Start thinking critically about advertising and other marketing aspects in everyday life

Take Care !!

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End Lecture 1