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Lecture 1

MGMA01H3 Lecture Notes - Lecture 1: Customer Relationship Management, Marketing Myopia, Market Segmentation

Management (MGM)
Course Code

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 the process by which companies create value for customers and build strong
customer relaonships in order to capture value from customers in return.
-Manage protable customer relaonships.
-Not just “telling & selling, but sasfying needs socially and ethically.
-Goal to a"ract new customers by promising superior value & to keep and grow
current customers by delivering sasfacon.
-Nowadays, they want to reach you directly, enriching your experiences with the
brand-living the brand.
oWalmart is the largest retailer by delivering its promise of “save money.
Live be"er. McDonads fulls its “im lovin it” mo"o by being the
customers favourite place to eat.
: must understand consumer needs, develop products providing superior
customer value/prices, distributes, and promotes them e+ecvely and ethically to sell
 !"#$ %& '
%$ %&(!"%"( 
)  * *+& 
-Needs are states of felt deprivaon like physical, social and individual needs.
-Wants forms taken and shaped by culture and individual personality.
-With buying power, there’s demand. To understand market, do consumer
research & analyze mountains of customer data.
P&G does low budget researches to improve lives.
,) -. /(%$" * 0." 1(." 2
-Market Oerings: some combo of products, services, informaon, or
experiences o+er to a market to sasfy need/want. Broadly, market o+erings
include persons, places, organizaons, informaon and ideas.
-Markeng Myopia: the mistake of paying more a"enon to specic products
than the benets/experiences products by these products.
They only focus on exisng wants and lose sight of underlying needs.
They forget that the product is a tool to problem solve.
oLike a ¼ inch drill thinks the customer just needs the drill bit,
but the underlying need is the ¼ inch. Marketers want to

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create brand experience like HPs PC that contains your life’s
) !$  3"%
-Customer value & sasfacon: happy customers will buy again and tell
others. Dissased will switch to competors and throw the old product
Marketers must set the right level of expectaon: too high, customers
get disappointed.
+) 1"4 !% 4.( 
-Exchange: act of obtaining desired object from someone by o+ering
something in return.
Doesn’t always have to be buying something like a polician wants
votes, and church wants memberships.
Markeng takes acons to build and maintain exchange relaonship
to target audiences of a service, idea or object.
Companies must retain customers and deliver superior value.
) Markets:
-Market: the set of all actual and potenal buyers of a product/service.
-Sellers search for buyers, idenfy them and deliver.
Acvies like consumer research, product development, communicaon,
distribuon, pricing and service are core markeng acvies.
Buyers also carry out markeng when they search for products, interact
with companies to obtain informaon, and make their purchases.
Marketers must e+ecvely deal with customer-managed relaonships by
1) How can we reach customers
2) How should our customers reach us
3) How can our customers reach each other.

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&: Art and science of choosing target markets and building
protable relaonships with them. It is customer and demand management.
Markets must know which customers to choose (target market) and how to serve
the customers best (our value proposion).
2 !"$ %&  Divide the market into segments (market segmentaon) and
which segments to go a;er (target market). The marketers must realize they cannot
serve everything, so it can only select well protable customers.
,2 !$%(% .%: The company must decide how to serve its target customers and
how it can di+erenate and posion itself in the market.
Brand’s value proposion is to set the benets or values, it promises to deliver to
consumers & sasfy their needs.
oLike Telus “the future is friendly” versus Rogers “Canada’s most reliable
network”. Their proposions di+erenate each other.
2 &.% 
i. Producon concept: holds that consumers will favour products that are available
and highly a+ordable.
Management is focused on improving producon and distribuon
Intermediaries Consumers
Major Environmental Forces
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