Hello, as you know this course is titled Marketing in a Digital World. Much of our focus will be on the latter portion of this title, the digital part. Thus I wanted to provide some attention to the earlier portion, the marketing part, by discussing what marketing is and how it influences the structure of our course. Now I've been teaching for nearly 20 years, and I've found that the term marketing means 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 perception of marketing as a form of manipulation. Indeed most portrayals of marketing executives in movies and television are rather quite unflattering. Thus I'm interested in learning what marketing means to you. Please take a look at the options on the screen, and respond to those that you feel best capture the essence of marketing. We'll examine your responses, and discuss them a bit later. In order to gain a better understanding of what marketing is all about, we visited with some of our esteemed marketing faculty here at the University of Illinois, and asked them a simple question, what is marketing? Here's what they said. Marketing to me is all the things that firms do to try to create value for consumers in the marketplace, and in an increasingly crowded marketplace. So that 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 present. So 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 in 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, and 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 life. 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. That's what marketing is. As you can see from these brief interviews, there are lots of different views about what marketing is. However, there are also some points in common. We'll explore this commonalities in just a moment. Before I do that, I would like to show you the official definition of marketing. According to the American Marketing Association, marketing is the activity, set of institutions, and processes for creating, communicating, delivering, exchanging offerings that have value for customers, clients, partners, and society at large. So 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 the consumer. However, there are also other types of exchanges such as B2B transactions between two firms. Typically the seller is offering a product. However, a seller could also offer a variety of other things, such as a service, an idea, or even an experience. Likewise, we usually think of the buyer as providing money to acquire this offering. However, buyers also offer other scarce resources such as their attention, their time, and their energy. All of this sounds quite wonderful. Buyers give sellers money in exchange for viable objects. However, there's more to the story. Two key points are missing. First, customers may not fully know what they really want and are often uncertain about the degree to which any particular product may meet their needs. Second, there are typically many firms offering competing products. These two factors, consumer uncertainty and competitive offerings makes the marketing process quite difficult for both firms and 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 something called the Four Ps, which are inside our marketers' tool kit. The concept of the Four Ps was introduced in 1960 by Professor Jerome McCarthy in Michigan State University. Thus 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 the Four Ps. The marketing mix, the Four 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, and 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, and 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 Four 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. Over the past 60 years, by strategically employing these Four Ps, marketers around the world have been able to effectively facilitate viable exchanges with their customers. Recently, the digital revolution has provided marketers and customers with a new set of tools, such as the Internet, the smartphone, and the 3D printer. In the remainder of this course, we'll examine how these new tools are fundamentally altering these four components of the marketing mix.
