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McMaster University
Rita Cossa

Henry Nguyen February 25, 2013 Lecture 10 - Chapter 8 What is Marketing? • Marketing is o an organizational function o a set of processes for creating, communicating, and delivering value to customers o managing customer relationships in ways that benefit the organization and its stakeholders o the focus on (1) discovering and then (2) satisfying prospective customers’ needs and wants • needs (e.g., food) and wants are different How Marketing Discovers and Satisfies Needs • marketing program represents the target market and marketing mix = 4Ps • The 4Ps: Controllable Marketing Mix Factors o product (goods, services, and ideas) o price o promotion includes advertising, personal selling, etc. o place (also known as distribution) • The Uncontrollable (Environmental) Factors o these are the environmental factors in a marketing decision and involve social, economic, technological, competitive, and legal forces o they are largely beyond the control of the marketing department and the firm An Organization’s Marketing Department Relates to Many People, Groups, and Forces Manufacturing is more recently known as operations General Terms • A market is (all criterion must be met) o (1) people or organizations with o (2) needs or wants and with o (3) the ability and o (4) the willingness to buy • A group of people or an organization that lacks any one of these characteristics is not a market • A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs The Evolution of Marketing 1. Production Era: seller’s market o focus on efficient production and wide-distribution as opposed to improving the p (product) – at first, it was mainly about getting the product out there 2. Product Era o managers and technical staff are in love with their p and believe that a better p will lead customers to their door o focus is on improving quality and effectiveness of product • e.g., the “better mousetrap” Exercise Questions • What features do disposers want in a mousetrap? Lower price • What features do reusers want in a mousetrap? Efficiency, better return on investment • Why did the ‘better’ (plastic) mousetrap fail? It’s gross • What can we learn from this exercise? • Marketers need to produce a ‘better’ product in the eyes of the customer, not the seller! 3. Sales Era: shift to a buyer’s market o excess capacity (supply > demand) due to the development of production lines • “sell what you make, not what you can sell” • firms hired salespeople to find customers 4. The Marketing Concept Era o focus is on satisfying consumers’ needs and the organization’s goals o made up of three parts/orientations: customer, service, and profit 5. The Customer Relationship Era o customer relationship management (CRM) is the process of learning as much as possible about customers and doing everything you can to satisfy them – or even exceed their expectation – with products over time o average business loses 15 - 35% of its customers per year
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