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MarketingADM 2320MarketingChapter 1Overview of MarketingWhat is MarketingMarketing a set of business practices designed to plan for a present organizations products or services in ways that build effective customer relationshipsInforming the consumers about the possibilitiesBuilding relationshipsMarketing must also address ethical implications of their actions on societyMarketing is not only about buyers and sellers changing money for goods and services or about making a profitMarketing mix create transact communicate and deliver valueMarketing plan a written document composed of an analysis of the current marketing situation opportunities and threats for the firmFirms develop a marketing plan that specifies the marketing activities for a specific period of timeoBroken down into various components How the product or service we be conceived or designedHow much it should costValue the fundamental purpose of marketing is to create value for both the firm and customerWhat you get for what you give upCore One Satisfying Customer Needs and WantsBegins with understanding their needs and wantsoNeed a person feeling physiologically deprived of basic necessities such as food clothing shelter and safelyoWant the particular way in which a person chooses to satisfy a need which is shaped by a persons knowledge culture and personalityoMarket refers to the group of people who need or want a companys products or services and have the ability and willingness to buy themCompanies divide the market into subgroups or segments of people to whom they are interested in marketing their products services or ideasMarketings Core Aspects Core Two Marketing Entails Value Exchange Exchange the trade of things of value between the buyer and the seller so that each is better off as a resultThe exchange can occur between any two parties Not simply a buyer and seller exchanging money for a good or service oCan be an exchange of information for convenienceCore Three Marketing Requires Product Price Place and Promotion DecisionsMarketing Mix the four Ps Product Price Place and Promotionthe controllable set of activities that a firm uses to respond to the wants of its target marketsProduct Creating ValueMain purpose of marketing is to create value by developing a variety of offerings including good services and ideasGoods items that you can physically touch1MarketingServices intangible customer benefits that are produced by people or machines and cannot be separated from the producerIdeas thoughts opinions philosophies and intellectual concepts that also can be marketedMany offerings represent a combination of goods and servicesPrice Transacting ValuePrice the overall sacrifice a consumer is willing to makemoney time energyto acquire a specific product or servicePlace Delivering ValueAll the activities necessary to get the product from the manufacturer or producer to the right customer when that customer wants itConcerned 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 minimized system wide costsPromotion Communicating ValueCommunication by a marketer that informs persuades and reminds potential buyers about a product or service to influence their opinions or elicit a responseCan enhance a product or services valueMarketing is Shaped by Forces and Players Within the FirmMarketing activities are shaped by factors that are both internal to the firm and externalThe consumer is the centre of all marketing activitiesTo deliver the best value they must leverage the full potential of their internal and external capacitiesMarketing is Shaped by Forces and Players External to the FirmCultural demographic social technological economic and political and legal changes shape a companys marketing activitiesMarketing can be Performed by Both Individuals and OrganizationsB2C The process in which businesses sell to consumersB2B the process of selling merchandise or services from one business to anotherSome companies are engaged in both B2B and B2C marketing at the same timeConsumers have started marketing their products and services to other consumers creating C2C consumers to consumersIndividuals can also undertake activities to market themselvesSocial media is quickly becoming an integral part of marketing and communication strategiesoAt the heart and minds of CanadiansMarketing Occurs in Many SettingsOccurs in both the profit and non profit sectorsMarketing isnt useful only in countries with welldeveloped economiesoCan also jumpstart the economies of less developed countries by actually putting buyers and sellers together to create new marketsMarketing is often designed to benefit an entire industryMarketing Helps Create ValueOver the last 100 years marketing as evolved from an activity designed simply to produce and sell products to an integral business function aimed at creating value for consumers and the companys shareholdersProduct Orientation2MarketingFocus on developing and distributing innovative products with little concern about whether the products best satisfy customers needsManufacturers believed that a good product would sell itself and retail stores typically were considered places to hold the merchandise until a consumer wanted itGenerally 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 needsSales OrientationView marketing as a selling function where companies try to sell as many of their products possible rather than focus on making products consumers really wantDepend on heavy doses of personal selling an advertising to attract new customersTend to focus on making a sale or on each transaction rather than building longterm customer relationshipsValueBased OrientationMost successful firms today are market orientedThey have gone beyond a production or sales orientation and attempt to discover and satisfy their customers needs and wantsBetter marketing firms recognized that there was more to good marketing than simply discovering and providing what consumers wanted and neededoThey would have to give their customers greater value than their competitorsValue reflects the relationship of benefits to costs or what the consumer gets for what he or she givesThey want to produce products and services that meet their specific needs or wants and that are offered at competitive pricesMust implement its strategy according to what its customers valueSometimes providing greater value means providing a lot of merchandise for relatively little moneyWhat is ValueBased MarketingValuebased marketing focuses on providing customers with benefits that far exceed the cost of acquiring and using a product or service while providing a reasonable return to the firmCustomers naturally seek options that provide the greatest benefits at the lowest costsMarketing firms attempt to find the most desirable balance between providing benefits to customers and keeping their costs downA business must also understand what customers view as the key benefits of a given product or service and how to improve themSome critical benefits may be service quality convenience and merchandise qualityThe other side of the value equation entails the firms ability to provide either a better productservice mix at the same cost or the same level of quality and convenience for a lower costHow Firms Compete on the Basis of ValuesConsumers perceptions change quickly competitors constantly enter markets and global pressures continually reshape opportunitiesoMarketers must keep a vigilant eye on the marketplace so they can adjust their offerings to meet customers needs and keep ahead of their competitionValuebased marketing isnt just about creating strong products and servicesshould be at the core of every firms functionsHow Firms Become ValueDrivenBecome valuedriven by focusing on three activities oShare 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 marketplaceIntegrate information across the firms various departments3
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