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MKT100.pdf

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Department
Human Resources
Course
MHR 523
Professor
Rasha Nasra
Semester
Winter

Description
Chapter 1- Overview of Marketing Thursday, February 14, 2013 9:08 PM What is Marketing? Marketing- A set of business practices designed to plan for and present an organization's products or services in way that build effective customer relationship -Requires thoughtful planning with an emphasis on the ethical implications of any of those decision on consumers and society in general Marketing Plan- A written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four P's, action programs, and projected or performa income (and other financial) statement Firms develop a marketing plan that specifies the marketing activities for a specific period of time. Marketing plan is broken down into various components- how the product or service will be conceived or designed, how much it should cost, where and how it will be promoted, and how it will get to the consumer Buyer and seller should be satisfied with the value they obtained from a transaction. Marketing Marketing helps Marketing is about Requires product, create value Satisfying customer price, price, Needs and wants And promotion decisions Marketing Marketing entails an Marketing can be exchange Performed by both individuals and organizations Marketing occurs In many settings Marketing Is About Satisfying Customer Needs and Wants -A need is when a person feels deprived of the basic necessities of life, such as food, clothing, shelter, or safety. -A want is the particular way in which the person chooses to fulfill his or her needs -Market refers to the groups of people who need or want a company's products or services and have the ability and willingness to buy them -Company must first identify the customers or market. -Marketers divide the market into subgroups or segments of people to whom they are interested in marketing their products, services, or ideas. -Target market- the customer segment or group to whom the firm is interested in selling its product and services -The process of identifying customer segments the company wants to target with its products and services requires market research Marketing Entail Value Exchange Marketing is about exchange - the trade of things of value between the buyer and the seller so that each is better off as a result Goods/Services --> Communications and Delivery --> Customers/Buyers ---> Money and Information Marketing Requires Product. Price, Place, and Promotion Marketing traditionally has been divided into a set of four interrelated decisions known as the marketing mix: the four Ps: product, price, place, and promotion Product: Creating Value One main purpose of marketing is to create value by developing a variety of offerings, including goods, services, and ideas to satisfy customer needs Goods are items that you can physically touch. Services are intangible customer benefits that are produced by people or machines and cannot be separated from the producer Ideas include thoughts, opinions, philosophies, and intellectual concepts that also can be marketed Price: Transacting Value Price is everything the buyer gives up- Money, time, energy in exchange for a product or service Marketers must determine the price of a product carefully on the basis of the potential buyer's belief about its value -Key to determining prices is figuring out how much customers are willing to pay so that they are satisfied with the purchase and the seller achieves a reasonable profit Place: Delivering Value Activities necessary to get the product from the manufacturer or producer to the right customer when the customer wants it Place decisions are concerned with developing an efficient system for merchandise to be distributed in the right quantities to the right locations and at the right time in the most efficient way in order to minimize systemwide costs while satisfying the service levels required by their customers Promotion: Communicating Value Promotion by communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response. Marketing Is Shaped by Forces and Players Within the Firm The consumer is the centre of all marketing activities, and offering the best value possible will attract customers to products and keep them loyal -For Marketers to deliver the best value to their customers, they must leverage the full potential of their internal capabilities. Work effectively with their partners and constantly evaluate and respond to the competitiveenvironment Marketing Is Shaped By Forces and Players External to the Firm External forces such as cultural, demographic, social, technological, economic, and political and legal chances shape a company's marketing activities -e.g., social trends that chances marketing strategies Marketing Can Be Performed by Both Individuals and Organizations B2B- Business to Business B2C- Business to Consumer C2C- Consumer to Consumer Social Media is quickly becoming an integral part of their marketing and communications strategies -Social Media- Use of internet tools to easily and quickly create and share content to foster dialogue, social relationships, and personal identities Marketing Occurs in Many Settings Marketing works in non-profit sectors -e.g., universities advertising for you to go there -Hospitals, government, politicians, charities Help jumpstart economies of less developed countries by actually putting buyers and sellers together to create new markets -Marketing is often designed to benefit an entire industry, which can help many firms simultaneously. Marketing Helps Create Values Different Marketing orientations, or philosophies: product orientations, sales orientation, market orientation, and value-based orientations orientation, and value-based orientations Most successful firms today is market orientation Product Orientation Focus on developing and distributing innovated products with little concern about whether the products best satisfy customers' needs. Companies with a product orientation generally start out by thinking about the product they want to build; they try selling the product after it is developed rather than starting with an understanding of the customers; need and then developing a product to satisfy those needs Sales Orientation Companies that have a sales orientation basically view marketing as a selling function where companies try to sell as many of their products as possible -Focused on advertising to attract new customers -Making a sale rather than building long-term relationships Market Orientation Start out by focusing on what consumer want before they design, make, or attempt to sell their products and services -Marketers' role is to understand and respond to the needs of consumers and to do everything possible to satisfy them Value-Based Orientation Value reflects the relationships of benefit to cost or what you get for what you give -They want products or services that meet their specific needs or wants and that are offered at competitiveprices What is Value-Based Marketing? Customers naturally seek options that provide the greatest benefits at the lowest costs -To develop a value based orientation, a business must also understand what customers view as the key benefits of a given product or service and how to improve on them -Firm's ability to provide either a better product/service mix at the same cost or the same level of quality and convenience for a lower cost How Firms Compete on the Basis of Value Consistently create and delivering value is quite difficult. Consumer perceptions change quickly, competitorsconstantly enter markets, and global pressures continually reshape opportunities -Markets adjust their offerings to meet customer needs and keep ahead of their competition How Firms Become Value-Driven Share Information Marketers share information about customers and competitors that has been collected through customer relationship management and integrate it across the firms' various departments Balancing Benefits with Costs Marketers constantly measure the benefits that customers perceive against the cost of their offering -Use available customer data to find opportunities in which they can better satisfy their customers' needs and in turn develop long-term loyalties Building Relationships with Customers Markets need to think about customer orientation in terms of relationship rather than transactions Transactional Orientation- regards the buyer-seller relationship as a series of individual transactions Relational Orientation- that buyers and sellers should develop a relationship Customer Relationship Management (CRM)- set of strategies, programs, and systems that focus on identifying and building loyalty among the firm's most valued customers Why is Marketing Important? Marketing Expands Firms' Global Presence Without the knowledge that can be gained by analyzing new customers' needs and wants in a segment by segment, region by region basis, one of marketing's main tasks- it would be difficult for a firm to by segment, region by region basis, one of marketing's main tasks- it would be difficult for a firm to expand globally Marketing is Pervasive Across the Organization Marketing department works seamlessly with other functional areas of the company to design promote price and distribute products Marketing Is Pervasive Across the Supply Chain Raw material suppliers --> Manufacturer --> Distributor --> Customer Supply Chain- Group of firms and set of techniques and approaches firms use to make and deliver a given set of goods and services -Excellent supply chains effectively and efficiently integrate their supply chain partners- suppliers, manufacturers, warehouses and stores, and transportation intermediaries -Must cooperate with each other and establish long-term relationships with one another to share data, make joint forecast, and coordinate shipments Marketing Makes Life Easier Marketing responsibilities also includes offering pleasant and convenient places for you to shop, appropriate opening hours for you to shop, products and services in the form you want and purchasing option. Marketing Provides Career Opportunities - On the creative side, positions such as artists, graphic designers, voice talent, animators, music composers, and writers represent just a few of the opportunities available to talented individuals -On the analytical side, marketing requires database analysts, market researchers, and inventory managers -On the business side requires strategist, managers, sales associates, etc Marketing Enriches Society Encourage their employeesto participate in activities that benefit their communities and invest heavily in socially responsible actions and charities -It could help the company in the long run Marketing Can Be Entrepreneurial Key to success of many entrepreneurs is that they launch ventures that aim to satisfy unfilled needs Chapter 2- Developing a Marketing Plan and Strategies Monday, February 18, 2013 5:42 PM Levels of Strategic Planning in Corporations Strategic planning in most organizations occurs on at least two levels, the corporate level and the functional level. Corporate planning is done by the company's top management and focuses on the overall direction of the entire company Senior managers decide on the business of the company, define the company's mission or vision, and set objectives or goals of the company. -Long Term direction of the company, which responds to changes in the business environment -HR, R&D, finance, manufacturing and marketing -Annual, 3-5 years Large companies that operate several business lines may see each of their strategic business units (SBUs) develop strategic plans for their products and markets they serve SBU is a division of the company that can be managed somewhat independently from other divisions since it markets a specific set of products to a clearly defined group of customers Marketing Planning Process- A set of steps a marketer goes through to develop a marketing plan Levels of Scope Duratio Strategic Focus Planning n Corporate Entire Firm 5 yrs Define the company's mission, set company's goals, and Planning establish the business portfolio SBU Single SBU within the firm 3-5 yrs Set goals and establish portfolio of products and markets for the business units Functional Product portfolio, single product, 1-3 yrs Develop marketing Planning bran or market for specific products, brands, or markets The Marketing Plan Marketing Plan is a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objective and strategy specified in terms of the four Ps, action programs, and projected or proforma income (and other financial) statements Marketing Plan entails five steps 1) Planning phase- define the mission and objectives of the business 2) Evaluate the situation be assessing how various players, both inside and outside the organization, affect the firm's potential for success 3) Implementation Plan - marketing managers identifying and evaluate different opportunities by engaging in a process known as segmentation, targeting and positioning (STP) 4) Implementing the marketing mix by using the four Ps 5) Control Phase- entails evaluating the performance of the marketing strategy by using marketing metrics and taking any necessary corrective actions -Doesn’t need to be in order 1) Define the Business Mission and Objectives Mission statement, a broad description of a firm's objectives and the scope of activities it plans to undertake, attempts to answer two main questions: What type of business are we? And What do we need to do to accomplish our goals and objectives? -Need to be answered at the highest corporate levels before marketing executives can get involved 2) Conduct a Situation Analysis Perform a situation analysis, using a SWOT (Strengths and weaknesses and the external environment in terms of its opportunities and threats) that assesses both the internal environment with regard to its strengths and weaknesses (internal analysis) and the external environment in terms of its opportunities and threats (external analysis) (internal analysis) and the external environment in terms of its opportunities and threats (external analysis) Situation analysis also includes an examination of market trends, customer analysis, and competitive analysis Additionally, the firms should assess the opportunities and uncertainties of the market place due to chances in cultural, demographic, social , technological, economic and political forces (CDSTEP) SWOT analysis is designed to help the firm determine areas in which is strong and can compete effectively and areas where it is weak and vulnerable to competitive attacks 3) Identify and Evaluate Opportunities by Using STP (Segmentations, Targeting, Positioning) Segmentation Market Segment- A group of consumers who respond similarly to a firm's marketing efforts Market segmentation-Process of dividing the marketing into distinct groups of customers where each individual group has similar needs, wants or characteristics who therefore might appreciate products or services geared especially for them in similar ways Targeting Firms evaluates each segment's attractiveness and decides which to pursue by using process known as target marketing Positioning They must determine how it wants to be positioned within those segments Positioning is about what the consumer think and feel about a brand or product, marketers try very hard through their various marketing efforts to shape consumers' perceptions regarding their brand or product -All marketers would like consumers to think of their brand or product in the way the company wants o present it to them Marketing Positioning- process of defining the marketing mix variables so that target customers have a clear, distinct, desirable understanding of what the product does or represents in comparison with competing products 4) Implement Marketing Mix and Allocate Resources Product and Value Creation Key to marketing success is the creation of value, where customers think the product is valuable enough to buy Price and Value for Money Value Based Marketing- Firms charge a price that customers perceive as giving them good value for products and services they receive Place and Value Delivery Make the product or service readily accessible when and where the customer wants it Promotion and Value Communication Communicate the value of their offering or value proposition -Consider which are the most efficient and effective methods to communicate with their customers, which goes back to understanding customers -E-newsletter is much more effective than either mail or TV advertising -Marketing organization is usually responsible for day to day operational decisions involved in executing the plan 5) Evaluate Performance by Using Marketing Metrics Who is Accountable for Performance? -At each level of an organization, the business unit and its manager should be held accountable only for revenues, expenses, and profits that they can control Performance Objectives and Metrics Assessing performance from sales and profits to see if they met it or not Financial Performance Metrics Revenue, sales or profits Social Responsibility Performance Metrics Impact on environment, diversity of their workforce, etc Impact on environment, diversity of their workforce, etc Strategic Planning is Not Sequential The Planning Process can move back and forth among the steps Portfolio Analysis Management evaluates the firm's various products and businesses and allocates resources according to which products are expected to be the most profitable for the firms in the future -Performed by SBU or Product Line (group of products that consumers may use together or perceived similar in some way -Managers use it to analyze brands or individual item Growth Strategies Products and Services Current New Markets Current Market Penetration Product Development New Market Development Diversification Market Penetration is easiest to implement Downsizing- exiting markets Market Penetration Market Penetration Strategy- employs the existing marketing mix and focuses the firm's efforts on existing customers -Existing customers buy more or referral Market Development Market Development Strategy- employs the existing marketing offering to reach new market segments -domestic or international or segments not currently served by the firm Product Development Product Development Strategy- offers a new product or service to a firm's current target market Diversification Diversification Strategy- introduces a new product or service to a market segment that is currently not served -Requires marketers to go outside of both their current products and markets and the risks of making mistakes are greater with this strategy Marketing Strategy and Sustainable Competitive Advantage Marketing Strategy- 1) Firm's target market 2) a related marketing mix- four Ps 3) bases upon which the firm plans to build a sustainable competitiveadvantage CompetitiveAdvantage- advantage a firm has that is not easily copied and thus can be maintained over a long time Building a Sustainable Competitive Advantage Customer Excellence Achieved when a firm develops value-based strategies for retaining loyal customer and providing outstanding customer service Operational Excellence -Efficient Operations, same product at a lower cost -Excellent Supply Chain Management and Strong Supplier Relations, May gain exclusive rights such as: selling merchandise to a certain area, obtain special terms of purchase that are not available to competitors, receive popular merchandise that may be in short supply -Human Resource Management, employeesinteract with customers for building loyalty Product Excellence Having products with high perceived value and effective branding and positioning -Invest into the brand itself Locational Excellence Locational Excellence Location is particularly important for retailers and service providers Multiple Sources of Advantage Firms may require multiple approaches Chapter 3- Analyzing the Marketing Environment Wednesday, February 20, 2013 2:50 AM A Marketing Environment Analysis Framework Marketerswho understand and manage the chances in their marketing environmentare able to adapt their product and service offerings to meet new challenges and opportunities -Marketersget their ideas for new products or services from monitoring and studying marketing environments Microenvironmental Factors CompanyCapabilities First that affects the consumer is the firm itself -Matching core competencies,satisfying customerneeds Competition It's critical that marketersunderstand their firm's competitors,including their strengths and weaknessesand likely reactions to the marketing activates their own firm undertakes -Firms use CI (Competitiveintelligence) to collect and synthesize informationabout their position with respond to their rivals -CI enables companies to anticipate market chances rather than merely react to them -Range from sending a retail employeeto a competitor'sstore and check merchandise, prices, and foot traffic -Reviewing public material such as websites, press releases, journals, reports, etc -Interviewing customer,suppliers, partners, former employees -Analyze a rival's marketing tactics, distribution practices, pricing CorporatePartners Collaboration with other companies Macroenvironmental Factors Culture -Shared meanings, beliefs, morals, values, and customsof a group of people Country Culture -Artifacts, behaviour, dress, symbols, physical settings, ceremonies,language differences, colours and tastes, and food preferences Regional Subcultures Region in which people live in a particular country affects the way they react to different cultural rituals Demographics -indicate the characteristics of human population and segments, especially those used to identify consumer markets Generational Cohorts Group of people of the same generation have similar purchase behaviours because they have shared experiences and are in the same stage of life Tweens Not teenagers or young children (9-12yrs) -Influence in family purchases -Immense buying power -Food and drinks, electronics, clothing Generation Y Millennial ranging from teenagers to young adults Between 13-32 -Strong emphasis on balancing work and life -Media Intensive and brand conscious Generation X Between 36-47 -Grew up where both parents worked -More likely to be unemployed,travel, in debt, movefar away from their parents -Likely to live longer with their parents -Wait to get married and buy houses later in life -Demand convenience -More risk adverse Baby Boomers 48-66yrs,after WW2 -Individualistic -leisure time represents a high priority for them -take care of themselves -obsession about maintaining their youth -anti-aging products, cosmetics,pharmaceuticals, biotechnology Seniors Over 65 yrs -Complain, need special attention, and take time browsing before making a purchase comparedto younger groups -Travel, second homes, cars, electronics,investments -Quality conscious Baby Boomers Gen X Gen Y Diversityas a cause Accept diversity Celebrate diversity Idealistic Pragmatic/cynical Optimistic/Realistic Mass Movement Self-reliant/individualistic Self-inventive/Individualistic Conform to the rules Reject rules Rewrite the rules Killer job Killer life Killer lifestyle Became institutions Mistrust institutions Irrelevance of institutions TV PC Internet Have Technology Use technology Assume Technology Task-technology Multitask Multitask fast Other boomers Friend-not Family Friends-family Income Median Canadian Income- $63900 Upper Class- Affluent by economicconditions -tend to purchase luxury items -<70,000 -Educated and work in executiveand managerial roles Middle Class -30000-70000 -Good lifestyle -Careful about their spending and value conscious Working Class/LowIncome- 20,000-30,000 -barely sufficient to coverbasic needs -barely sufficient to coverbasic needs Education -Higher education level leads to higher incomes -Education level spends disposable dollars differently Gender -Women make the majorityof purchasing decisions and then influence most of the remainder Ethnicity -Growing immigrant population -Ethic Canadians spends more than the white counterparts Social Trends -Change over time in their popularity and importance Greener Consumers -Green marketing involves a strategic effort by firms to supply customers with environmentally friendly merchandise -Concern with purity of the air and water to the safety of beef and salmon -Each person can make a difference -Health-conscious consumerscontinue to fuel the markets for organic foods, natural cleaning and personal care products Marketing to Children -Children are gullible PrivacyConcerns -Internet created an explosion of privacy concerns Time-Poor Society -Canadians have less time for leisure and spend with family -Technologyhas allowed consumers to fast-forward through commercials,thereforemissing messages from marketers -Cope with the lack of leisure time by multitasking Technological Advances -RFID in supply chain -How we bring media into our homes -Social media helps firms take criticism -TV networks are encouraging customers to share their experiences -Mixture of social media and traditional media is an opportunity for marketers to demonstratetheir customercare efforts Economical Situation Economicsituation- economicchanges that affect the way consumersbuy merchandise and spend money -Marketersmonitor the general economicsituation, both in home country and abroad -Factors: inflation, foreign currency exchange rates, interest rates, and recession Inflation -Increase in prices for goods -Purchasing dollar decrease Foreign Currency Fluctuation -As CDN$ increases, Canadian exports to Americans is more expensive, whereas American exports to Canada is cheaper Canada is cheaper Interest Rates -Interest rate goes up, Savings goes up, -Interest rate goes down, borrowing goes up Recession -Period of economicdownturn when the economicgrowth of the country is negative for at least for a couple of quarters -Stock prices decreases -Unemploymentincreases -Business and Consumer confidence falls -Spending falls Political/Legal Environment -comprises political parties, governmentorganizations, and legislation and laws to promoteor inhibit trade and marketing activities Regulations such as: -false/misleading advertisement -identify harmful materials -fair and reasonable business practices when they communicatewith consumers -achieve current objectivesor a response to current events Chapter 4- Marketing Research Wednesday, February 20, 2013 4:34 AM Marketing Research- Key prerequisite to successful decision making; consist of a set of techniques and principles for systematicallycollection,recording, analyzing, and interpreting data that can aid decision makes involvedin marketing goods and services The Marketing Research Process 1) Define the Research Problem and Objectives Defining the marketing proble
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