ECON 344 Lecture Notes - Corporate Social Responsibility, Marketing Ethics, Business Ethics

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16 Oct 2011
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Chapter 1: Overview of Marketing
Marketing: A set of business practices designed to plan for and present an organization’s 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
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 20th 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 customer’s 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
Product can be good,
service or idea
Price is overall sacrifice
consumer willing to make
money, time, energy
All activities necessary to
get product from
manufacturer to consumer
- supply chain is important
to ensure things are
available when ppl want it
Communicating value,
enhancing a products
value to consumers
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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 firm’s 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 firm’s 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
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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 firm’s 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 firm’s current target market
o Offers new product/service to firm’s 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 firm’s focus on efficient operations and excellent supply chain management
Product Excellence
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