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CHAPTER#1 BUS 343.docx

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Simon Fraser University
Business Administration
BUS 343
Jason Ho

CHAPTER #1 PART 1 Every product has a value. Customer value = the benefits a customer receives from buying and using a good or service in relation to the costs and sacrifices of buying and using it. Focus on Value Creation Marketing 1 = is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large. Marketing 2 = is the process of achieving individual and organizational objectives by creating superior customer value for one or more target markets with a sustainable strategy. Target Market = the group(s) of consumers or customers on which an organization focuses its marketing plan and toward which it directs its marketing efforts. Marketing is about Creating Customer Value Marketing is about creating value for diverse stakeholders. Stakeholder = people or organizations who influence or are influenced by marketing decision; any people or organization which has a stake in the outcome of the economic exchange. Exchange = the process by which some transfer of value occurs between a buyer and a seller. One important stakeholder is a consumer. Consumer = the ultimate user of a good or service. It can be individual or org. Marketing concept = a business orientation that focuses on achieving organizational objectives by understanding customer needs, and creating and delivering value in exchange that satisfies the needs of all parties. Need = the recognition of any difference between a consumer’s actual state and some ideal or desired state. It depends on ind’s history, cultural env, exp. (I need to eat, I am hungry, scared, cold) Want = the desire to satisfy needs in specific ways that are culturally and socially influenced. (I want Burger or I want Falafel) Product delivers a benefit when it satisfies a neeBenefitn= the outcome sought (V3 of seek) by customer that motivates buying behavior (that satisfies need or want). Value proposition (benefits-costs) > price = then people buy Demand = customer’s desire for products coupled with the resources to obtain them. (they want and can afford to buy it) Market = all customers or potential customers who share a common need that can be satisfied by a specific product, who have the resources to exchange for it, who are willing to make the exchange, and who have the authority to make an exchange. Marketplace = any location or medium used to conduct an exchange (Old Sana’a market or EBay). Marketing and Exchange Relationships For exchange to occur, at least two people or org. must be willing to make a trade, and each must have something the other wants. Businesses now understand that it is more expensive to attract new customers that it is to retain currents ones. So, now they calculate lifetime value of a customer and look how much profit each can bring. Lifetime value of a customer = how much company expects to make from a particular customer, adding all his current and future purchases – cost to maintain that relationship. Marketing people work with every other company departments.(cross functional relationships) Careers in marketing LOOK TABLE 1.1 page 13: Advertising, Brand Management, Business to Business Marketing, Direct- Response Marketing, Supply Chain Management, International Marketing, Marketing Models and System Analysis, Marketing Research, New Product Planning, Retail Management, Sales and Sales Management, Service Marketing. What Can We Market? Product = good, service or idea that can be marketed. Consumer goods = the tangible products that individual consumers purchase for personal or family use. Services = Intangible products that are exchanged directly between the producer and the customer. Popular culture = music, movies, sports, books, celebrities and other forms of entertainment consumed by the mass market. Marketing influences what is popular, but products and the communication of those products reflect the key social beliefs and values of the times. Business –to-Business Goods and Services = the marketing of those goods and services that business and organization customers need to produce other goods and services, for resale or to support their operation. Goods businesses buy are called industrial goods. E commerce = buying and selling goods or services electronically, usually over the internet. Non-for-Profit organizations also practise marketing concept. They are organizations with charitable, educational, community or other public service goals that buy goods and services to support their functions and to attract and serve their members. You can also market good idea (wearing seat belt), place (fundraising event) or people (yourself on Linkden). PART 2 MARKETING as a DECISION MAKING PROCESS Marketing is fundamentally is a decision making process that allows individuals and organizations to achieve objectives by creating value that satisfies stakeholder needs and wants. Marketing Decision Process Understand the Marketing Strategy: Marketing Mix: Implementation & Evaluation: Opportunity Specify the Value Create the Value Realize the Value For more detailed framework look page 17 Figure 1.2. 1. Understand Opportunity Indentify opportunities to create value to organization by creating value to the customers. 1. Understand factors relating to the nature of the market. (trends, consumer behaviour, industry dynamics, your competitors) 2 Understand your own company 2. Marketing Strategy: Specify the Value Marketers make strategy decisions to achieve the objectives of the org. Stategy= set of decisions that explain what and why an org. needs to do. Tactics = explain how to do. 1. Market segmentation = a process of dividing the overall market into groups of consum
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