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Lecture

Chapter 1&2 Textbook Notes.docx

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Department
Marketing
Course
MKT 100
Professor
Marla Spergel
Semester
Winter

Description
Chapter 1: Overview of Marketing What is marketing?  Marketing: set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships  Marketing Plan: 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 Ps, action programs, and projected or pro forma income (and other financial) statements  Core Aspects of Marketing o Marketing is about satisfying customer needs and wants  Need: person feeling physiologically deprived of basic necessities; food, clothing  Want: particular way in which a person chooses to satisfy a need, shaped by person’s knowledge, culture, and personality  Market: refers to the groups of people to whom an organization is interested in marketing its products, services, or ideas  Target Market: customer segment or group to which firm is interested in selling its products and services  Potential customers who have both an interest in the product or service and the ability to buy o Marketing entails value exchange  Exchange: trade of things of value b/w buyer and seller so that each is better off as a result  Buyer provides money + information; seller provides communication + delivery o Marketing requires product, price, place, and promotion decisions  Marketing Mix (four Ps): controllable set of activities that a firm uses to respond to the wants of its target markets  Product: creating value through  Goods: items that can be physically touched)  Services: intangible customer benefits that are produced by people or machines and cannot be separated from the producer  Ideas: include thoughts, opinions, philosophies, and intellectual producer  Price: transacting value  Price: overall sacrifice a consumer is willing to make – money, time, energy – to acquire a specific product or service  Key to determining prices is figuring out how much customers are willing to pay  Place: delivering value  Place: all the activities necessary to get the product from the manufacturer or producer to the right customer; strong and efficient distribution system required  Promotion: communicating value  Promotion: communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response o Marketing is shaped by forces and players external to the firm  Competitors, demographics, social / cultural trends, technology, economic, political / regulatory  Current social trends: concerns about the environment and obesity o Marketing can be performed by both individuals and organizations  B2C (business-to-consumers): process in which businesses sell to consumers  B2B (business-to-business): process of selling merchandise/services from one business to another  C2C (consumer-to-consumer): process in which consumers sell to other consumers o Marketing occurs in many settings  Not specifically for a firm to make profits, non-profit sector, universities, different countries, charities, hospitals, etc o Marketing helps create value  Production-Oriented Era: turn of the century  1920  Believed that good product would sell itself  Concerned with product innovation not with satisfying needs of ind. Customers  Sales-Oriented Era: 1920  1950  Manufacturers had capacity to produce more than what consumers wanted to buy  personal selling and advertising: tried to sell as much as possible  Market-Oriented Era: 1950  1990  Buyer’s market – consumers had choices and were able to make purchasing decisions on basis of factors such as quality, convenience, and price  Value-Based Marketing Era: 1990  Current  Value: reflects the relationship of benefits to costs, or what the consumer gets for what he or she gives What is Value-Based Marketing?  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 the firm  How Firms Compete on the Basis of Value: continually adjust offerings to meet customer needs and keep ahead of their competition  How do firms become value driven? o Sharing Information  About their customers and competitors across their own organization and with other firms that might be involved in getting the product or service to the marketplace  Ex. Manufacturers and transportation companies o Balance their customers’ benefits and costs o Build relationships with customers  Transactional Orientation: buyer-seller relationship as series of individual transactions  Everything that happened before or after transaction is of little importance  Relational Orientation: method of building relationship with customers based on the philosophy that buyers and 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 loyalty among the firm’s
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