Brief Introduction to Marketing

Unit 1:  Brief Introduction to Marketing

NOTE:  Questions are at the end.  Be sure to turn your answers in via e-mail by no later than Sunday night 11:59 p.m.  Late responses will be docked 10 percent each day.  Sorry, but no exceptions.

Marketing is an essential part of business.

In case I didn't state this strongly enough, let me repeat:  Marketing is an ESSENTIAL part of business in our global society.  I can say with complete confidence that without marketing, there would simply be no business, at least not in a capitalist society.

First and foremost, you’ll want to know that marketing-related expenses typically represent about 20-30% of gross sales revenue (the biggest number on a financial statement and a nightmare to those financial people who try to keep the marketing people focused on spending money wisely).  Bowflex, for example, spends 30% of their gross sales revenue on marketing (mainly direct response TV advertising w/ some direct mail and a dynamic website).

Secondly, "advertising" is NOT the same thing as “marketing” nor is “public relations.”  Typically, the triad of persuasion disciplines that make up what we call Integrated Marketing Communications (IMC) includes 1) marketing, 2) advertising, and 3) public relations.  How you know when advertising is advertising is when there was payment made to air the message (called "media payments").  If I pay Vanity Fair to print my ad, that is advertising, a subset of marketing.  If I send out a press release, that is NOT advertising but is public relations.  Websites can be related to both advertising and PR.  All three working in tandem (the best way!) is called IMC.

• Here are three very simple definitions for you to remember:
• Marketing:  the use of pricing, promotion, place (distribution) and product (the four P’s) to encourage the exchange of a commodity in order to satisfy a need or desire.
• Public Relations:  managed communication between an organization and its publics.
• Advertising: Paid, persuasive, and mass-mediated communication.
• The three together are called Integrated Marketing Communication.
  
  Thirdly, marketing is communication, utilizing the 4P's of Marketing (also known as the “Marketing Mix") to influence an action. If you aren't trying to influence an action, well, your effort isn't marketing.
  
  Lastly, marketing exists in business to generate revenue. This is why I get all riled up when budget cuts have to be made and marketing budgets are hit hard... it makes no sense to me to decrease revenue… it only makes sense to me to increase revenue and there are only two avenues to do this... sales and marketing.  Sales is usually considered the face-to-face part of marketing.
  
  A little more about the famous (infamous?) 4 P’s of marketing:
  
  1) Product (which also includes services).  Basically, these are the “goods” you’re trying to sell. It can be a can of Bud, a VW, or a doctor’s office.  You almost always discuss your product or service in terms of BENEFITS or FEATURES.
  
  2) Price - how much the product/services cost the purchaser. 
  
  3) Place - this is really distribution.  This is WHERE a purchaser can acquire a Product/Service... typically from a store, in person, on the web... and, this also includes distribution channels... because if you cannot get your product/service to the recipient, well, you don't get customer satisfaction... known as repeat business or CRM (Customer Relationship Marketing).  Building customer loyalty (brand loyalty) is the name of the game in marketing!
  
  4) Promotion - this is the advertising (TV, Radio, Print) and Direct Marketing (Catalogs, mailings, postcards, brochures, invitations, telemarketing and more.  It may also include Public Relations also known as "Marketing Communications" (including press releases, media events and the like), in-store displays, email, spam, websites, popups and more.
  
  So in summary... Marketing DRIVES revenue generation which is ESSENTIAL to business success. Marketing is a way to INFLUENCE the behavior of CHOSEN target market segments.

AMA definition of marketing:  the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services (products) to create exchanges that satisfy individuals, organizations and society.

Any definition of marketing will have these elements:  

• Product, pricing, promotion, place (distribution)
• Exchanges  (long-term is your goal.  Brand loyalty)
• Satisfaction of needs:  customer and organization both

Three important definitions:

Transactional marketing:  based largely on price.  One-time.  Adversarial in nature.  Mere exchanges and no long-term relationship.

Relationship marketing:  the new key term.  Interdependence between the buyer and seller.  Brand loyalty.  A collaborative process.  Cooperation between parties.