Week 01: Marketing Basics

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We Believe in Being Honest

An important quality of a disciple of Jesus Christ is being honest with ourselves, others, and God. Please review the Academic Honesty section in the Syllabus. You will learn how to avoid academic dishonesty in this and other classes in the future.

Introduction

Marketing strategy begins by asking what is most important to the customer, so businesses can provide what the customers want–and both can profit. Knowing what you want in life helps you seek the best gifts and avoid choices that would deter you from happiness. David A. Bednar (2022), a modern-day prophet, taught, “Each of us should evaluate our temporal and spiritual priorities sincerely and prayerfully to identify the things in our lives that may impede the bounteous blessings that Heavenly Father and the Savior are willing to bestow upon us.”  Start today by asking yourself what is most important to you and build on that foundation. Pursue your righteous desires. Know Heavenly Father loves you and wants you to have joy in this life and in eternity. 

What Is Marketing? 

Welcome to MKT 120. This class will help you understand what marketing is , so you can become a marketer yourself. You will learn how to analyze consumers and create a marketing plan for a company. 

 At its most basic level,  marketing involves every process moving a product or service from a company to a consumer. 

Marketing includes the following: 

1. Understanding customer needs and wants 
2. Developing products or services to meet those needs 
3. Satisfying customer needs and making products or services that customers want to buy 
4. Promoting products and services and moving them through the appropriate distribution channels to reach those customers 
5. Delivering value to ensure that promotion and the marketing process return profit to the company 

 Marketing, quite simply, is about understanding what your customers want and using that understanding to make a profit. 

Let’s break down this definition further:

• Understanding customer needs. Companies use market research to develop a detailed picture of its customers, including a clear understanding of their wants and needs. Methods of market research will be covered in a later chapter.
• Developing products or services to meet customer needs. Marketers analyze the data collected and can predict how products might be changed, adapted, or updated to appeal to customers. 
• Satisfying customer needs. Marketers want to understand their customers’ needs, so customers will be pleased with their product purchase and will be more likely to make additional purchases and recommend them to others. 
• Promoting products and services. Marketers decide effective ways to advertise products and make them accessible to consumers. 
• Profitability. Profitability is when a company’s revenue is greater than its expenses. In marketing terms, profitability means adding value to a product so that the price customers pay is greater than the cost of making the product. 

 How do businesses market their products? How do they decide what to do? They use a process to make the best business decisions they can based on information. This process is called a marketing process. 

What Is the Marketing Process? 

The marketing process refers to the series of steps that assist businesses in planning, analyzing, implementing, and adjusting their marketing strategy. 

The five-step process (see Figure 1.1) involves understanding the marketplace and customers, developing a marketing strategy, delivering value, growing customer relations, and capturing value from customers. 

 

Step 1: Understand the Marketplace and Customers 

Before you can start the marketing process, you need to have a good idea of what your marketplace looks like. This means answering some basic questions about your customers.

• Who are your customers? 
• What is their income and purchasing power? 
• How much are they likely to spend on your products or services? If you decide to sell at lower prices to attain higher unit sales volume, your marketing strategy would look very different than if you decided to sell fewer products at a higher price. 

 

Step 2: Develop a Customer-Driven Marketing Strategy 

Marketing strategy refers to a business’s overall “game plan” to focus its limited resources to reach prospective customers and turn them into paying customers, hopefully for the long run. 

Two basic types of marketing strategy include a product-driven strategy and a customer-driven strategy, in which you analyze prospective consumers and then—and only then—create something that they want or need. We’re going to focus on the latter strategy. 

In a customer-driven strategy, the company shifts the focus from the product or service itself to its users. Customers’ needs are the central focus and the point of beginning, not an afterthought. The primary goal in a customer-driven marketing strategy is to determine what users want and/or need and find beneficial then satisfy those users. Instead of being product-centric, it’s about being customer-centric and developing a mutually beneficial relationship with customers. 

The goal is to establish a connection and a relationship. Understand who your customers are, what their needs and wants are, and how you can best meet those needs and wants. 

Know your target market better than your competitors and create a strong value proposition for those users—a promise of value that communicates the benefits of your company’s products or services. This makes your product or service desirable to potential customers, helps them understand why they should buy it, how your company’s product or service differs from those of its competitors, and how your offerings are superior to similar offerings from your competitors.  

 

Step 3: Deliver High Customer Value

Customers have a lot of buying options and alternatives today. How can a company attract and—even more importantly—retain its customers? The answer is relatively simple: you give them value for their money. By definition,  customer value is the ratio between the perceived benefits and costs incurred by the customer in acquiring your products or services

The mathematical formula is simple: value = benefits/price (V = B/P)

“Value” from the customer’s perspective is a complex term. Consider four value types: 

• Functional value: what the product “does” for the customer in terms of solving a particular want or need 
• Monetary value: what the product actually costs relative to its perceived worth 
• Social value: how much owning the product allows the customer to connect with others 
• Psychological value: how much that product allows the customer to “feel better” 
• Value is increased by boosting the benefits (in the form of product, place, or promotion) or minimizing the price.
   

Step 4: Grow Profitable Customer Relations 

Profitable customer relationships are the key to the success of any business. This step in the marketing process is where marketers acquire, keep, and grow customer relationships. Successful marketers know that acquiring customers is one of the hardest (not to mention one of the most expensive) elements of marketing. However, when you know clearly who those potential customers are, you can more effectively determine how to reach them, thus maximizing your marketing dollars. 

One sale per customer isn’t enough. You want repeat buyers, so marketers need to remind customers about the company’s products and/or services and how those products and services have met their needs and improved their lives so they make repeat purchases. Marketers need to consider how to reach customers about their offerings and make it easy and convenient for those customers to make continued purchases. 

When customers have a positive relationship with a company or its products or services, they’re more likely to become repeat buyers. Satisfied customers are also more likely to be interested in buying additional products or services from your company, and they tend to recommend products to others, further reducing the company’s costs of getting new customers. 

Step 5: Capture Customer Value in the Form of Profits 

The goal of successful customer relationship management (CRM) is creating high customer equity—the potential profits a company earns from its current and potential customers. The more loyal a company’s customers are, the more that company can count on them to make money. It’s a relatively simple concept: increasing customer loyalty results in higher customer equity. 

Increasing customer equity is the goal of marketers because it demonstrates financial success, now and in the future. Think about it in simple terms: the higher a company’s customer equity, the more profit the company generates, and the more valuable that company (and its products or services) becomes on the market. 

What Is a Marketing Plan? 

Now that you have a better idea of what marketing is, you are ready to start developing a marketing strategy and plan. A marketing strategy describes how a company will reach consumers and convert them into paying customers. Having a solid yet flexible marketing strategy is a good business practice, no matter what kind of business you are in. 

A marketing plan is a formal business document used as a blueprint or guide for how a company will achieve its marketing goals. A marketing plan differs from a business plan in that it focuses more on market research, attracting customers, and marketing strategies, whereas the business plan covers much more than that. Marketing plans are important tools because they act as roadmaps for everyone in the company. Writing a marketing plan forces you to specify goals and develop strategies to reach them and encourages you to research markets and competition. A strong marketing plan will encourage entrepreneurs to think deeply about their business and profit potential, helping them make better business and marketing decisions. Additionally, a marketing plan can create greater involvement and cohesiveness among employees by clarifying goals and expectations. Plans should also be seen as flexible guides rather than absolute rules. All good marketing plans are living, breathing documents that help you measure success while allowing for course corrections when necessary. 

In MKT 120, you will create a marketing plan, but you don’t have to do it all at once. You will do part of the marketing plan every week, so by the end of this course, you should have a solid understanding of how to create a customer-driven marketing strategy and how to put your ideas into a document. 

Look at this overview of the class to understand what you will be accomplishing every week. 

 

Marketing Plan assignment per week: 

• Week I: Company Profile 
• Week 2: Buying Factors and Segmentation
• Week 3: SWOT and Perceptual Map 
• Week 4: Survey Questions and Analysis
• Week 5: Goals and metrics 
• Week 6: Promotion Types and Ads
• Week 7: Executive Summary

Conclusion

A marketing plan is a guide for how a company will achieve its goals. Do you have a plan for how you will accomplish your goals? M. Russell Ballard (2017), a modern-day prophet, taught the importance of making a plan. “Over the years, I have observed that those who accomplish the most in this world are those with a vision for their lives, with goals to keep them focused on their vision and tactical plans for how to achieve them. Knowing where you are going and how you expect to get there can bring meaning, purpose, and accomplishment to life.” Your goals are your destinations, and your plan is the route you take to get there. Consider your goals for your life, keep an eternal perspective of what is most important, and make a plan of action for how you will get there.