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Lecture 2

MGTA02H3 Lecture Notes - Lecture 2: Philip Kotler, Voice Of The Customer, Business Cycle


Department
Management
Course Code
MGTA02H3
Professor
Arif Toor
Lecture
2

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Week #2
Chapter 2: Marketing: Satisfying Customer Needs and Wants
Goals are qualitative: Become the leading brand in industry, show grandma that we love her
Objectives are quantitative: Sell x number of hamburgers, open x branches in the next five years
Business - cycle that exists based on 2 variables, satisfied customers & business profits, that become dependent
on each other to function.
A business must satisfy customer needs in order to make a profit, because without customers to buy &
provide the input of revenue a business can’t make up for expenses, therefore cannot make profit.
A business must make a profit in order to satisfy customer needs, because without profit motivated
entrepreneurs here will be no motivation to build a business & provide products/services, therefore not
satisfy the customers’ needs.
No Customers = No Profit
“The butcher, the brewer & the baker did not pursue their trades out of benevolence or love for humanity” - Adam
Smith, describing the idea that businessmen work to generate money & not for the purpose of providing the
needs of society.
Marketing - business function concerned with planning & organizing the creation of a product, determining a price
that people will pay, making the product known & making it available to customers.
“A social process by adopting which individuals and groups acquire what they need and want through
exchange of value” – Philip Kotler
“A management system to identify, anticipate, and satisfy customer needs” – Chartered Institute of
Marketing
Product focus - orientation toward producing improved goods & services for which an organization has proven
expertise.
Business main focus is selling, improving existing goods/services.
Customer Focus - orientation toward determining the needs & wants of customers in the market & developing the
goods & services that meet those needs.
Business main focus is figuring out what the public want.
Marketing concept - business philosophy that stresses that the business’ resources should primarily be directed
toward serving customer needs.
When needs are met customers respond by providing revenue.
“The business’ resources should primarily be directed toward serving customers’ needs…” - Philip Kotler,
an influential marketing thinker/American professor who invented this term.
Evolution of Strategic Management of Businesses According to Philip Kotler
19th century - focused on production (making products)
First half of 20th century - focused on sales (persuading customers to buy products)
Middle of 20th century - focused on serving customer needs

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7 billion people on this earth
1. No business has unlimited time
2. No business has unlimited resources
3. No business can sell everything
4. No business can sell to everybody
Target market a group of similar people who have similar needs and wants and are most likely to buy a product.
Example: Mr. Big-and-Tall sells to men who are taller and heavier than average.
Market segmentation dividing total population into groups/categories of people who share common
characteristics, habits or behaviours which give them common needs.
1. Demographic segmentation identifying people based on some external characterises that they share (age,
gender, race, ethnicity social & economic characteristics: marital status, income, education, social class,
household size, religion, etc.)
Example: Most Quebecers share the same race as other Canadians, they look Caucasian. However,
Quebecers’ language, politics, culture is different; Baby boomers (1946-1964)
Examples: luxury hotels, international airlines, beer, chainsaws, breakfast cereals, etc.
2. Psychographic Segmentation - identifying people according to their internal traits, such as their attitudes,
beliefs (religious vs. atheist vs. agnostic), values (Liberal vs. Conservative, pro-life vs. pro-choice, for or
against gay marriage), & motivations (materialist vs. conservationist)
List of Traits:
o religious or unbelieving
o Extroverted or introverts
o sentimental or unemotional
o adventures or cautious
o proud or humble
o disciplined or uninhibited
o generous or uncharitable
Example: Apple slogan “Think different” targeted at consumers who consider themselves to be
innovative, adventuresome, and willing to try new things
Example: political parties, charities
3. Geographic segmentation - distinguishing people according to where they live. (region: Alberta vs Quebec;
rural vs urban; climate)
Example: Quebecers have different tastes, attitudes and behavior from residents of the rest of Canada
Example: British Columbia are close to the mountains therefore buy more ski equipment in
comparison to NewFoundland who are close to the ocean, & therefore buy more sail boats.
Example: Molson Canadian, Petro-Canada, etc.
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