CHAPTER
Marketing
in Todays
Economy
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Introduction
Commoditization
A consequence of mature industries, where slowing
innovation, extensive product assortment, excess
supply, and frugal consumers force margins to the
floor.
All
organizations both for-profit and nonprofit
require effective planning and a sound
marketing strategy to achieve their goals and
objectives.
Todays
economy is characterized by rapid
technological change, economic/financial
anxiety, and increasing consumer skepticism.
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The Challenges and Opportunities
of Marketing in Todays Economy
Power
shift to customers
Massive
increase in product selection
Audience
and media fragmentation
Changing
value propositions
Shifting
demand patterns
Privacy,
security, and ethical concerns
Unclear
legal jurisdiction
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Change in Daily Media Usage by
U.S. Adults, 2008-2011 (Exhibit 1.1)
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The Childrens Online Privacy
Protection Act (Exhibit 1.2)
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Increasing customer power is a
continuing challenge to
marketers in todays economy. In
what ways have you personally
experienced this shift in power;
either as a customer or as a
business person? Is this power
shift uniform across industries
and markets? How so?
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Basic Marketing Concepts:
Marketing Defined
Marketing
.the process of planning and executing the
conception, pricing, promotion, and distribution of ideas,
goods, and services to create exchanges that satisfy
individual and organizational objectives.
Marketing
(2005 AMA definition)
an organizational function and a set of business
processes for creating, communicating, and delivering
value to customers and for managing customer
relationships in ways that benefit the organization and its
stakeholders.
Marketing
(1985-2005 AMA definition)
(2007 AMA definition)
the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging 7
offerings that have value for customers, clients, partners,
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in
Basic Marketing Concepts:
What is a Market?
Market
A collection of buyers and sellers; a group of
individuals or institutions that have similar needs
Marketspace
Electronic marketplaces unbound by time or space
Metamarket
A cluster of closely related goods and services that
center around a specific consumption activity
Metamediary
Provides a single access point where buyers can locate
and contact many different sellers in the metamarket
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Common Metamarkets and
Participants (Exhibit 1.3)
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Basic Marketing Concepts:
What Is Exchange?
Exchange
The process of obtaining something of value by
offering something in return; typically obtaining
products for money
Five
Conditions of Exchange
There must be at least two parties to the exchange.
Each party has something of value to the other party.
Each party must be capable of communication and
delivery.
Each party must be free to accept or reject the
exchange.
Each party believes it is desirable to exchange with
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the other party.
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Basic Marketing Concepts:
What Is a Product?
Product
Something that can be acquired via exchange to
satisfy a need or a want
Examples
of Products
Goods
Services
Ideas
Information
Digital products
People
Places
Experiences and events
Real or financial property
Organizations
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Basic Marketing Concepts:
Utility
Utility
The ability of a product to satisfy a customers needs
or wants
Five
Types of Utility
Form utility attributes or features that set the
product apart
Time utility products available when customers want
them
Place utility products available where customers
want them
Possession utility transfer of ownership or title; ease
of acquisition
Psychological utility positive experiential attributes12
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Major Marketing Activities and
Decisions
Strategic
Strategy the organizations game plan for success
Tactical planning specific markets/segments and the
marketing programs that will meet their needs/wants
Marketing plan the outline of the marketing program
Research
Planning
and Analysis
Internal analysis analyzing the firms current
strategy and performance
Competitive intelligence analyzing competing
businesses
Environmental scanning analyzing the external
environment
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Situation analysis combination of all three analyses
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How concerned are you about
privacy and security in todays
economy? Why do so many
people, particularly younger
people, seem to be unconcerned
about privacy? Will these issues
still be important in 10 years?
Explain.
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Major Marketing Activities and
Decisions (continued)
Developing
Competitive Advantage
Competitive advantage something the firm does
better than competing firms
SWOT analysis strengths, weaknesses, opportunities,
threats
Marketing
Strategy Decisions
Market segmentation and target marketing
Marketing program decisions (the marketing mix)
Branding and positioning
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Major Marketing Activities and
Decisions (continued)
Social
Responsibility and Ethics
Social responsibility maximizing positive impact on
society, while minimizing negative impact
Marketing ethics principles/standards that define
acceptable conduct in marketing activities
Implementation
and Control
Process of executing the marketing plan
Marketing activities must be controlled to ensure that
the strategy stays on course.
Developing
and Maintaining Customer
Relationships
Transactional marketing
Relationship marketing
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Transactional and Relationship
Marketing (Exhibit 1.4)
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The Challenges of Marketing
Strategy
Unending
Change
People-Driven
Lack
Nature of Marketing
of Rules for Choosing Marketing Activities
Increasing
Declining
Customer Expectations
Customer Satisfaction and Brand
Loyalty
Competing
in Mature Markets
Increasing commoditization
Little real differentiation among product offerings
Aggressive
Cost-Cutting Measures
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The text argues that marketing
possesses very few rules for
choosing the appropriate
marketing activities. Can you
describe any universal rules of
marketing that might be applied
to most products, markets,
customers, and situations?
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American Customer Satisfaction
Index (Exhibit 1.5)
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