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ECON 344 (1)

Summary Notes from Entire Textbook Summary notes from the entire textbook (Ch1 - Ch 17). I took this class in Spring 2010

21 Pages

Economics (Arts)
Course Code
ECON 344
Kevin Hood

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Chapter 1: Overview of Marketing Marketing: A set of business practices designed to plan for and present an organizations products or services in ways that build effective customer relationships Need: person feeling physiological deprived of basic necessities such as food, clothing, shelter, safety Want: the particular way a person chooses to SATISFY A NEED, which is shaped by knowledge, culture, personality Marketing entails VALUE EXCHANGE trade of things of value between buyer/seller so each is better off Marketing Mix Decisions Product can be good, Price is overall sacrifice consumer willing to make service or idea money, time, energy Communicating value, All activities necessary to enhancing a products get product from value to consumers manufacturer to consumer - supply chain is important to ensure things are available when ppl want it Marketing can be performed by both individuals and organizations - B2C (Business to Consumer) - B2B (business to business) - C2C (consumer to consumer, like ebay) 4 Orientations of Marketing - Production-Oriented Era Around turn of 20 century Believed good product would sell itself Concerned with product innovation, not with satisfying needs of consumers - Sales-Oriented Era 1920-1950 Great Depression and WWII conditioned ppl to consume less, thus firms needed to SELL Heavy doses of personal selling and advertising Marketing was selling function to sell as much as possible rather than focus on what consumers really want -Market-Oriented Era After WWI Birth of shopping centre, so purchasing decisions based on quality, convenience, price - Value-Based Marketing Era Attempt to discover and satisfy customers needs and wants Give greater value than competitors What is Value-Based Marketing? - marketing that focuses on providing customers with benefits that far exceed the cost (money, time, effort) of acquiring and using a product or service while providing a reasonable return to firm - in changing world, consistently creating and delivering value is quite difficult - value-based marketing is NOT just about creating strong products and services (Walmart is about being cheap!) - firms become value driven by focusing on 3 activities 1) share information about their customers and competitors 2) strive to balance customers benefits and costs 3) concentrate on building relationships with customers Transactional Orientation anything before/after is of little importance Relational Orientation belief that buyers/sellers should develop a long-term relationship Customer relationship management (CRM) business philosophy and set of strategies, programs and systems that focus on identifying and building loyal among firms most valued customers Supply Chain - the group of firms that make and deliver a given set of goods and services Why is marketing important? 1) Marketing expands firms global presence 2) Marketing is pervasive across organization (across all areas of organization) 3) Marketing is pervasive across supply chain 4) Marketing provides career opportunities and offers info for you 5) Marketing enriches society 6) Marketing can be entrepreneurial Chapter 2: Developing Marketing Strategies Strategic Planning occurs on at least two levels Corporate level: focuses on overall direction of entire company, long term, updated regularly to respond to changes in the business environment (mission/goals, objectives) Functional level: marketing, HR, short term, specific plans for products/brands Strategic Marketing Planning ProcessA set of steps a marketer goes through to develop a strategic marketing plan Step 1: Define mission statement o Broad description of firms objectives and scope of activities o What type of business is it? Goals and objectives? o Often includes SUSTAINBLE COMPETITIVE ADVANTAGE Something firm can persistently do better than competitors Step 2: Situational Analysis using SWOT Step 3: Identify and Evaluate Opportunities using STP o Identify and evaluate opportunities for increasing sales and profits using STEP o Market segment: a group of consumers who respond similarly to a firms marketing efforts o Targeting: process of evaluating the attractiveness of various segments and then deciing which one to pursue as a market o Positioning: process of defining the market mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products o Developing Market Mix Product and Value Creation Price and Value for Money Cost-based pricing Competitor-based pricing Value-based pricing (first determine perceived value of the product from customers point of view, then price accordingly) Place and Value Delivery Promotion and Value Communication Step 4: Implement the Marketing Mix: Allocating Resources o Develop budget, setting schedules o Portfolio analysiswhich products are most profitable? BCG Boston Consulting Group Matrix Step 5: Evaluate Performance and Make Adjustments o Did we achieve performance goals? Why or why not? o Growth Strategies - 4 major strategies Market Penetration: o a growth strategy that employs the existing marketing mix and focuses the firms efforts on existing customers o Attracting new consumers to firms current target market or encouraging current customers to patronize firm more often o Requires greater marketing efforts, such as increased advertising, additional sales and promotions Market Development o Growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international o Ex: Fairmont hotels, forever21 Product Development o Growth strategy that offers a new product or service to a firms current target market o Offers new product/service to firms current target market o Ex: Fairmont adds online booking Diversification o Growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently serve o Maybe related or unrelated Macro Strategies Customer excellence o Involves a focus on retaining loyal customers and excellent customer service Operational excellence o Involves a firms focus on efficient operations and excellent supply chain management Product Excellence o Involves a focus on achieving high-quality products, effecting branding and positioning are key Chapter 3: Ethics and Socially Responsible Marketing Scope of Marketing Ethics Business ethics: refers to branch of ethical study that examines ethical rules and principles within a commercial context, various moral and ethical problems that might arise in a business setting Marketing ethics: refers to those ethical problems that are specific to the domain of marketing Ethical climate: set of values within a marketing firm, or in the marketing division of any firm, that guides decision making and behaviour o must develop set of explicit rules and implicit understandings that govern all the firms transactions The Link between Ethics and Corporate Social Responsibility Corporate social responsibility: refers to the voluntary actions taken by a company to address the ethical, social and environmental impacts of its business operations and the concerns of its stakeholders 2 dimensions: ethical & socially responsible = ideally should be both Framework for Ethical Decision Making Step 1: Identify Issues Step 2: Gather Information and Identify Stakeholders Step 3: Brainstorm and Evaluate Alternatives Step 4: Choose a course of Action Integrating Ethics into Marketing Strategy Planning phase o Along with
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