American International College

Marketing Principles
 How Do We Choose Which Brand?
WB
 How do you decide when choosing a…

 Car?

 Vacation?

 Clothes?

 Restaurant?
How Do We Choose Which Brand?

 Value
 What something is worth to you based upon what
you are willing to give up to get it
▪ Net Utility
▪ Net worth

 Value is a function of benefits and costs

 Benefits are what we gain or get
 Costs are what we give up or sacrifice
 Value = Benefits – Costs (just a representation)
Importance of Value

 Why is value so important?

 Do you ever buy Powerade instead of Gatorade because
P
you feel bad for Powerade?
 We choose the option that has the most value for us at
that point in time
 One brand wins (the one we buy) and the rest are losers
(the ones we don’t buy)

 Marketing is all about winning by providing

customers with more value than the competition
 Includes staying with the “status quo” or nothing
Types of Benefits
Chat
 Types of Benefits
 Functional benefits help us reach some goal or
objective

 Psychosocial benefits increases self-esteem or

perceived status with others
▪ Emotions and feelings about ourself

 Experiential benefits are sensual and emotional in

nature – we experience them Chat
Types of Costs

 Types of costs – things you give up

 Money or things of value
 Time
 Physical, mental, or emotional effort
▪ Easier to keep doing the same-old-same-old P-Mall
▪ Many learning curves in life

 These are our finite resources

Marketing Definition

 American Marketing Association

 Marketing is the activity, set of institutions, and
processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and society
at large. (Approved 2017)
Needs and Wants
 Need Chat

 Feeling that something is missing

 Want
 Thing that satisfies the need

 Implication
 Needs are universal
 Wants vary based upon culture
 Marketers stimulate needs and sell
wants
Lunch
 Product and Exchange
 Product – what is it?
 Something of “perceived” value
▪ Value is in the eye of the beholder

 Exchange
 2+ parties – some process (ie digital
currency) Poll

 Each gets something of perceived value

 Voluntary
 Each party is capable/competent to
enter into exchange
Class Definition of Marketing
 What is the purpose of marketing – why do we do it?
 To get what we want
▪ Individual, organization, and societal goals

 What is the best way to get what you want?

 Give others what they want (value)

 Marketing
 The process of getting what you want by giving others
what they want
 Creating value and capturing value
Production Concept
 Assumption
 People are price-sensitive

 Strategy
 Cost leadership – have the lowest costs
▪ Mass production, experience curve, economies of scale
▪ Intensive distribution, low prices, high market share

Poll
 Risk Jeans

 Cost is not the most important feature

 Consumers want or value other benefits besides low cost
 Product Concept
 Assumption WB
 People want the best product (best performance, most features, best
styles) – more is better!
 4K televisions, cell phone features race, Tesla, latest “smart” products

 Strategy
 Keep adding new features that improve the performance of the
product

 Risk
 New features and enhancements ≠ new or more benefits
 Value of the new benefits do no outweigh the costs of the new features
 Overall value goes down
 Sales Concept
 Assumption
 People are like sheep – they don’t know what they want
 Easily fleeced

 Strategy
 Sell them what you have (instead of what they need) by using lots of
persuasion through advertising, promotion, and personal selling Chat –
Animal

 Risk
 Dissatisfied customers will not repurchase and will generate bad
WB
word-of-mouth (tell others)
 Higher marketing expenses from always trying to get new customers
▪ More profitable to sell to returning customers because of lower marketing
expenses
 Marketing Concept
History
 Customer-focus; customer is king, market orientation; relationship
marketing; customer engagement, CEM– customer experience
management, CX, customer journey

 Company-wide effort – everyone is in marketing

 Long term goals - Must market in a way that reaches the long-term
goals of the organization’s stakeholders and society (get what you
want)

 Strategic - Must compete strategically against other organizations

offering value to your potential customers
 Apple, Samsung, Huawei, OnePlus, Google Pixel, Blackberry, MS, Nokia, LG,
Motorola, Sony
Scope of Marketing
Me -
Break Out
 Business
 Red Cross and not-for-profit activism
 Politics
 Social movements
 Celebrities
 Musicians, actors, influencers…
 Organizations for social change
 Army, Navy, Air Force, Marines….
 Health and medical services…
 Sports teams and players
 Marketing Mix – 4 P’s
 4 P’s or Marketing Mix
 Product
 Promotion (Marketing Communication)
 Place (Distribution)
 Price
 5th P = people

 The marketer creates the right

combination of the mix to create
value for the target market
(customers)

 Marketing Mix is under the

marketer’s control to a large degree
 Marketing Environment
Macro
Micro • Demographics
• Competitors • Political
Demographics
• Customers • Nature
• Public Culture
• Technology
• Suppliers • Economy
Promotion
• Distributors

Economy Political
Place Legal
Customer Price

Competition Product Nature

Micro – factors Macro– factors

that affect only Technology that affect all
the business businesses
Marketing Careers
 Digital and Traditional Marketing Communications
 Advertising executive; Media manager
 Digital Marketing, Social Media and Mobile Marketing managers
 Event and Promotional Marketing managers
 Brand and Product Management
 Consumer and Business to Business (B2B) brand managers
 Retail Management
 Buyers and visual merchandising
 Store management
 Sales and Account Management
 Developing relationships with key customers
 Marketing Research
 Supply Chain and Logistics
 Coordinating and working with companies that are involved in the creation of a product (raw
materials, processing, manufacturing, distribution, etc) through to after sale support
 These opportunities exist in all organizations because all organizations do
marketing; A top business degree based on Bureau of Labor Statistics Business,
Government, Not-For-Profit, Music and Entertainment, Sports, International
Corporations, Military, Politics