As you know, this course is titled Marketing in a Digital World. Much of the focus of this course beyond the latter portion of this title, the digital part. So I wanted to provide some attention to the first portion, the marketing part by discussing where marketing is and how it influences the structure of our course. Well, first of all, I've been teaching marketing for over 20 years, and I've found that the term Marketing means very different things to different people. For example, some people think of marketing as advertising, others think of it as sales, and many have a negative impression of marketing as a form of manipulation. Indeed, most portrayals of marketing executives in movies and television are rather unflattering. Thus, I'm interested in learning what marketing means to you. Please take a look at the options that will soon appear on the screen and respond to the option that you feel best captures the essence of marketing. In order to gain a better understanding of what marketing is all about, I visited with some of my esteemed marketing colleagues here at the University of Illinois and ask them a rather simple question. What is marketing? Here's what they said. Well, marketing to me is all the things that firms do to try to create value for consumers in the marketplace and an increasingly crowded marketplace. So that it has to do with all the points of contact that a consumer might have with a firm, for example, in the marketplace, what kinds of products they see, how those things are packaged, how they are present. So yeah, it's got to do with the physical component, but it also has to do with the essence of the brands that consumers see in the marketplace and all the work that goes into telling a story about what this brand is and why this brand is different from other brands in a way that's meaningful and value and distinct and makes you want to choose not just any product, but that specific product. When I think of the definition of marketing, I think of how products and services, and especially experiences add value to customers lives. Because I study consumer behavior, a lot of that value means social value. Value in terms of enjoyment and pleasure, and also value in terms of helping them live a more enjoyable and productive lives. Marketing is about developing customer relationships, developing long-term relationships with consumers through providing them with goods or services that are tailored to their needs. Well, as you can see from these brief interviews, there are different views about what marketing is. However, there are also some points in common or explore these commonalities in just a moment. However, before we do that, I'd like to show you the official definition of marketing from the American Marketing Association. According to the AMA, 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. Sounds wonderful. In essence, marketing is the enactment of a mutually beneficial exchange between two parties, a seller and a buyer. We usually think of the seller as a firm and the buyer as a consumer. However, there are other types of exchanges, such as B2B transactions between two firms. In most cases, typically, we think of the seller as offering a product. However, the seller could also offer a number of other things like a service, an idea, or experience. Likewise, we tend to think of the buyer as providing money to acquire these offerings. However, buyers also provide other scarce resources, such as their attention, their time, and their energy. Now, all of this sounds quite wonderful. Buyers gives sellers money and it's changed for valuable objects. What could be better? However, there's more to the story, two key points are missing. First, consumers often don't know what they really want and maybe uncertain about the degree to which a particular product will meet their needs. Second, there are typically many firms offering competing products that appeal to the same customer. These two factors, consumer uncertainty and competing offerings, makes the marketing process quite challenging for both firms as well as consumers. For example, the average US supermarket offers over 100 different types of shampoos. It would take hours to learn about all of their ingredients, potential benefits, and appropriateness for your hair. In order to overcome these challenges, marketers have developed a number of useful tools and techniques. One of the most useful tools in the marketers tool kit is what is commonly referred to as the four P's. The concept of the 4 Ps was introduced way back in 1960, by Professor Jerome McCarthy and Michigan State University. So this concept has stood the test of time. Indeed, although the marketing faculty that we interviewed offered somewhat different views about the definition of marketing, all of them clearly identified how do some of the 4 Ps. The marketing makes the 4 Ps. They're really all important because what the consumer sees or experiences in the marketplace is really the confluence of a bunch of decisions that got made about what product to sell, at what price, and through what distribution channels. More importantly, I think with what messaging strategy because all of these decisions combine to this bundle of attributes that we consider to be the essence of the brand. That's really what at the end of the day, consumers are going to use what they know about the brand, how they feel about the brand. That's how they're going to make those decisions about whether or not a brand is meaningfully distinct in a way that's going to make them choose that brand as opposed to other similar brands in the marketplace. When we talk about marketing, a lot of times, we start with this framework about the 4 Ps, product, place, promotion, price. All of these are extremely important and all of them can add value to consumers lives and also to the firm. These 4 Ps are also known as the marketing mix, and provide marketers with a set of tools to help facilitate exchange. Let's take a close look at each of these 4 P's. The first p is product. Marketers are more likely to be successful, that they offer innovative products that meet customer needs and exceed their expectations. Another aspect of this portion of the marketing mix is a product's brand proposition, which should be unique and tell a compelling story. For example, Head and Shoulders has clearly breaded itself as a shampoo specifically formulated to meet the needs of people with dandruff. Our second P is promotion. Having innovative products and strong brands is good but not enough. Marketers also need to promote their offerings to potential customers. Traditionally, this has been done via television advertising, sales promotions such as coupons. For example, Dove has effectively built a high level of awareness through many years of television and magazine advertising. The third P is placement. Once potential customers are aware of a product and its benefits, marketers must find a way physically deliver this product to them. Thus, most manufactured products are channeled through a set of distributors who deliver these products to retail stores for convenient purchasing by customers. For example, all of these shampoos were purchased at local supermarket, that's located only about a mile from my home. The final P is price. When consumers see products at the store, they must decide which one they will purchase. Now, one of the main factors that influence this decision is a price of these various products. So picking the right price is a very important marketing decision. Marketers can employ a variety of different pricing strategies, ranging from value pricing to premium pricing. For example, some of these shampoos, such as swab our price quite low, while others, such as,one moment please, such as L'Oreal, are price quite high. Over the past 60 years, by strategically employing these 4 Ps, marketers around the world have been able to effectively facilitate viable exchanges with their customers. Now recently, the digital revolution has provided marketers and customers with a new set of tools such as the Internet, the smartphone, and a 3D printer. The remainder of this course, will examine how these new tools are fundamentally altering these four components of the marketing mix.
