Introduction to Marketing 301

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Introduction to Marketing 301
Professor Jim Harvey, Associate Professor of
Marketing
School of Management

George Mason University

e-mail jharvey_at_som.gmu.edu
website http//mason.gmu.edu/jha
rvey Interests Recent Accomplishments Support
of Public and Nonprofit Institutions
Healthcare
Marketing Customer Satisfaction

Service Value Creation Electronic
Commerce Distance Learning
Technology Executive Development Counsultancies B
ooze-Allen-Hamilton, Bureau of Land Management,
Fairfax County Park Authority, Internal Revenue
Service, Environmental Protection Agency, United
Way of America, Federal Trade Commission,
National Institutes of Health, Department of
Health and Human Services, World Bank and others
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Basic Marketing60-Minute Tutorial
Customer Focus
Vision Defined by Consumers
Establish Presence in the Market
TOTAL MARKETING EFFORTS
Customer Satisfaction is Key
Price for Customer Value
Build Relationships with Segments
Provide Convenient Access
Manage Product and Service Quality
Jim Harvey

jharvey_at_som.gmu.edu
http//mason.gmu.edu/jharv
ey
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Marketing in Contemporary Society - PERCEIVED

• To begin understanding your perspectives, lets
  discuss some common marketing challenges you may
  want to learn more about.
• What comes to mind when you hear someone is
  talking about MARKETING.
• Hype?
• Junk mail?
• Advertising?
• Rebates?
• Telemarketing?

Have you heard of napster? How did you learn
about it? What does this say about marketing?
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False Perceptions Marketing of
Marketing REALLY is...
Marketing as Selling
Getting AND Holding Customers
Marketing as Advertising
Use ALL parts of Marketing Mix
Marketing as Panacea
Not magic that can FIX everything
Short-term orientation
Long-term orientation
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Marketing in Contemporary Society - REALITY
Eight Keys to Successful Marketing 1. Customer
focus - How do you listen? 2. Business vision
seen through customers needs 3. Customer
satisfaction key objective 4. Build
relationships with segments of the market 5.
Manage product and service quality 6. Provide
convenient access 7. Price for customer value 8.
Consistent communications to establish market
presence and to satisfy customer information needs
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Marketing Vs Selling ...
Production
Selling
Selling
Build It and they will come
Consumption
OurNewBeginnings.com spent 25M during Super Bowl
Y2K. What were the results?
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Marketing Vs Selling ...
Consumer
Marketing
Integrated Marketing Effort
Customer Satisfaction
Achievement of Organizational Goals
FEEDBACK
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1. Customer Focus Walk a mile in your
customers shoes. Describe an organizations key
clients - Who are they? Why do they buy - use
their services? What problem are they solving for
customers?
Discussion Name Firestones customers. Why do
people purchase tires? What are common methods
that organizations list and describe their
customers?
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Who are Your Customers?
Consumers
Suppliers
Co-Workers
Organization
Media
Other Agencies
Public
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What Affects Buyer Behavior?
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2. Business Vision Customers buy what the
product/service DELIVERS not what it is MADE
FROM Typewriters are now ancient history. Whats
next? Videotape? Telephone? Television? Does
videoconferencing technology compete with the
airline industry? Do workers want drills or holes?
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3. Customer Satisfaction is Key How satisfied
are your customers? How do you know? What
causes different levels of satisfaction?
Discussion How useful are customer comment
cards?
Who would include Firestone when shopping for
tires?
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Factors that Affect Customer Satisfaction
Friendly Employees
Knowledgeable Employees
Overall Customer Satisfaction
Helpful Employees
Courteous Employees
Quick Service
Accuracy of Billing
Billing Clarity
Billing Timeliness
Good Value
Competitive Pricing
Service Quality
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4. Build relationships with segments of the
market Is everyone your client? Can you satisfy
everyone? How and why do companies focus on
relationships? Compare Wal-Mart with Sams Club
on price, selection and convenience. What does
the Wal-Mart strategy say about the structure of
markets? How do technology customers differ?
Assess iwon.coms ability to hold users
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Why Do Consumers Purchase Technology?
Primary Motivation Family
Career Entertainment Status
Neo- hearthminders
Mouse Potatoes Gadget Grabbers
Cyber-snobs X-techs
Fast Forwards Techno- strivers
Technology pessimists Technology optimists
Disposable Income Disposable Income Low
High Low High
Traditionalists
Handshakers
Media Junkies
Country Clubbers
Sidelined Citizens
Source Forrester Research, Inc.
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Why are customers More Profitable Over Time?
Total Company Profits
1 2 3 4 5 6 7
Pizza Hut knows each satisfied customer has a
lifetime value of 10,000
Year
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5. Manage the Forces that Affect Product/Service
Quality What is quality? Who defines it? Are
products different than services? What about
positioning? Do you like the design of the
PT Cruiser? Plymouth Neon? Small Trucks?
Discussion How do customers define quality?
What is the difference between service and
product marketing?
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Product Positioning
High
PRICE
Low
Low
High
Richness
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Product Life Cycle
Maturity
Decline
Sales ()
Growth
Introduction
Time
Light Advertising, pre- introduction Publicity
Heavy use of advertising, PR for awareness sales
promotion for trial
AD/PR decrease Limited Sales Promotion,
Personal Selling for distribution
Ads decrease. Sales Promotion, Personal
SellingReminder Persuasive
Advertising, PR, Brand loyalty Personal Selling
for distribution
Discussion How do marketing challenges change
across the product lifecycle?
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Services are Different Than Products

• Intangible - They cannot be touched, seen,
  tasted, heard, or felt or stored.
• Inseparable - Production and consumption
  activities are inseparable. Services cannot
  normally be produced in a centralized location
  and consumed in decentralized locations
• Heterogeneous - Services tend to be less
  standardized and uniform than products due to
  their dependence upon the performance of
  individual employees/individuals
• Perishable - Services cannot be stored,
  warehoused or inventoried. An empty seat in a
  theatre cannot produce revenue later.
  Perishability results in discount pricing of
  services at almost any price greater than their
  variable costs.

Discussion General Electric estimates that each
1B sales in gas turbines translates into 2B in
service revenue. How does this fact affect their
pricing policy? Why are services often more
profitable than products?
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6. Provide Convenient Access How do
organizations provide convenient access? How
convenient is it to obtain their
product/service? Why is E-Trade the largest
pureplay bank? Should other banks worry?
Discussion How importance is convenience to
clients? How do customers define convenience?
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Value Added by Channels
WHEN Desired
P R O D U C E R S
C U S T O M E R S
WHERE Convenient
SERVICE Needed
ASSORTMENT Wanted
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7. Price for Value How do organizations price
products and services? How do customers conclude
prices are fair? Discussion Why is ebay
popular? How important will auction-driven
pricing become? What is the effect on consumer
knowledge? What about B2B auctions? What do you
think about Cokes attempts at dynamic pricing?
Amazons relationship pricing?
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Subjective Price
Outcome
Factors affecting subjective price

• The consumers
• background
• The consumers
• shopping behavior
• The firms
• marketing mix
• The brands overall
• image
• The brands
• perceived quality
• The brands
• perceived value
• The availability of
• substitutes
• Competitors price
• strategies
• The consumers
• urgency of need

Price perceived as high
(1)
Products subjective price to consumer
Price perceived as fair
(2)
Price perceived as low
(3)
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8. Communicate Presence in the Market and
Address Customers Information Needs How do
organizations assure their presence in the
marketplace? What are their customers
information needs? How many of you have heard
of Napster? How did you learn about it? What
does this say about managing marketing
communication?
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Integrated Marketing Communications
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Goals and Tasks of Promotion
Informing
Reminding
PLC Stages Maturity
Target Audience
PLC Stages Introduction Early Growth
Persuading
PLC Stages Growth Maturity
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How Successful was this Ad?
Nissan's Ad Campaign Was A Hit Everywhere But In
the Showrooms
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How is Technology Changing Marketings 4Ps?
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The 4Is of the New Marketing
Interactive - Dialogue-drive, permission-based.
Rather than Get the message out Bring the
customer in is the goal. The Internet is not
the only way - face-to-face, consumer advisory
councils, briefings and market audits are
included. Intuitive - Marketing research in a
world of short life cycle competition is replaced
by a Fire, Re-aim, Fire strategy based on rapid
execution and quick learning. Integrated - Old
views of marketing as a separate function give
way to a realization that marketing is integrated
into every functional area of the organization -
executive management, operations, product
development, sales and customer
relations. Individualized - Client segmentation
and targeted messages has given way to
personalized one-to-one relationships based on
intimate customer knowledge.
Discussion Do you agree with this new view?
Who looks wiser in 2001 - Toys R Us or E-Toys?
Is it fair to compare these two organizations?