Chapter 14 Notes

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Accounting & Financial Management
AFM 131
Robert Sproule

AFM 131- Chapter Fourteen Notes Marketing: Building Customer and Stakeholder Relationships What is Marketing: - Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of goods and services to facilitate exchanges that satisfy individual and organizational objectives - Markets are groups of people with unsatisfied wants and needs and who have the resources and willingness to buy products - What marketers do at any point in time is solely dependent on the customers’ needs at the time - Today, there is an increasing trend in green marketing, which are marketing efforts to produce, promote, and reclaim environmentally-sensitive products The Evolution of Marketing: - Marketing evolved in four eras: (1) Production, (2) Sales, (3) Marketing Concept, (4) Customer Relationship 1. The Production Era - From the time people settled in Canada to the start of the 1900’s - The general philosophy was for businesses to produce as much as possible - Due to limited production capabilities and vast demand for products, production orientation was logical and profitable as demand exceeded supply - Most goods were bought as soon as they were available for sale - The greatest marketing need was for distribution and storage 2. The Sales Era - Mass production techniques were developed around 1920 - Production capacity exceeded the immediate market demand - Business philosophy changed to an emphasis on selling - Marketers aimed to persuade consumers to buy existing products 3. The Marketing Concept Era - Starting in 1945, there was a tremendous demand for goods and services, especially amongst returning soldiers starting new lives - The baby boom caused a simultaneous boom in consumer spending - Competition for the consumer’s dollar was fierce - Organizations had to be responsive to consumers if they wanted to gain business - The marketing concept was developed in the 50’s and consisted of (1) customer orientation (finding out what the customer wanted and providing it), (2) service orientation (ensuring everyone in the organization has the same goal of ultimate customer satisfaction), and (3) profit orientation (focus on goods/services that will earn the most profit and enable the organization to expand) - This marketing concept was applied throughout the 60’s-80’s 4. The Customer Relationship Era - Started in the 1990’s - Customer Relationship Management (CRM) is the process of learning as much as possible about customers and doing everything possible to satisfy them or exceed their expectations - The idea is to enhance customer satisfaction and stimulate long-term loyalty Non-Profit Organizations and Marketing: - Charities use marketing to raise funds or obtain other resources - The not-for-profit category is one of the most competitive segments in the Canadian marketplace. It is of paramount importance that not-for-profit organizations utilize the key brand building and customer management strategies to succeed The Marketing Mix: - The four P’s of marketing (product, price, place, promotion) represent the basics of marketing - These four factors are called the marketing mix because they are blended together in a marketing program 1. Designing a Product - Once consumer needs a target market have been researched, you can start by developing a product - A product is any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eyes of the consumers - Following this, do concept testing; develop an accurate description of a product and ask people whether the concept appeals to them - The process of testing products amongst potential users is called test markxzzx eting - The company may want to offer some brand names to attract people right away; brand names are used to distinguish a seller’s goods or services from those of competitors 2. Setting an Appropriate Price - From a marketing viewpoint, price is the money or other considerations (including goods or services) exchanged for the ownership or use of a good or service - Price depends on many factors, including costs involved in producing, distributing, and promoting the product 3. Getting the Product to the Right Place - One must decide how to best get products to the consumer, which is the focus of place - Intermediaries are often used as a middleman to distribute goods from the producers to the consumers - Getting the product to consumers when and where they want it is critical to market success 4. Developing an Effective Promotion Strategy - Promotion consists of all the techniques sellers use to inform and motivate consumers to buy their goods or services - Techniques may include advertising, personal selling, public relations and discounts - The last step in the marketing process includes relationship building with customers and listening to feedback and continually adapting to changes in the market and demand Providing Marketers with Information: - Market research is the analysis of markets to determine opportunities and challenges, and to the information needed to make good economic decisions - It helps determine what customers have historically purchased and what they’re likely to want in the future - It also recognizes business trends, ecological impacts, and international trends - Marketing researchers need to pay attention to what all stakeholders have to say - The research process consists of (1) defining the problem/opportunity and present situation, (2) collecting data, (3) analyzing research data, and (4) choosing a solution and implementing it 1. Defining the Question and Determining the Present Situation - Market researchers should be given the freedom to help discover what the present situation is, what problems/alternatives there are and how to go about gathering and analyzing information 2. Collecting Data - Secondary data is the least expensive method of gathering information because it has already been complied by others and published - It should be gathered first to avoid incurring unnecessary expense - Primary data are facts, figures, and opinions that you have gathered yourself - Techniques to collect primary data include observation, conducting surveys or questionnaires, personal interviews, or focus groups (small groups of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its products, or other issues) 3. Analyzing the Research Data - The data collected must be turned into useful information - Careful, honest interpretations can help a company find useful alternatives to specific marketing challenges 4. Choosing the Best Solution and Implementing It - The final step in resea
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