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Chapter 5-Understanding Marketing Processes and Consumer Behaviour

Management (MGT)
Course Code
H Laurence

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Chapter 5: Understanding Marketing Processes and Consumer Behaviour
What Is Marketing
Marketing - Planning and executing the development, pricing, promotion and distribution of ideas, goods, and services
to create exchanges that satisfy both buyers' and seller's objectives.
Marketing Concept - The idea that the whole firm is directed toward serving present and potential customers at a profit
Providing Value and Satisfaction
Value and Benefits
Value - Relative comparison of a product's benefits versus its costs
- Value = Benefits divided by Costs
Value and Utility
Utility - Ability of a product to satisfy a human need or want
Time utility - makes products available when consumers want them
Place Utility - Makes products available where customers can conveniently purchase them
Ownership Utility - transferring ownership from store to customer
Form Utility - turning raw material into finished goods
Goods, Services, and Ideas
Consumer Goods - Products purchased by individuals for their personal use
- Firms that sells products to consumers for personal consumption are engaged in consumer marketing
Industrial Goods - Products purchased by companies to use directly or indirectly to produce other products
- Firms that sell products to other manufacturers are engaged in industrial marketing
Services - Intangible products, such as time, expertise, or an activity that can be purchased
Relationship Marketing - A type of marketing that emphasizes lasting relationships with customers and suppliers
Marketing Environment
External Environment - Outside factors that influence marketing programs by posing opportunities or threats
Political and Legal Environment
- to gain public support, marketers uses ad campaigns for public awareness on local, regional, or national
issues of importance
Social and Cultural Environment
- more people are working at home, women are joining workforce, number of single parent family is
increasing, food preferences and physical activities reflect the growing concern for healthy lifestyle.
Technological Environment
- created new products, as well as replacing others. Made communications easy
Economic Environment
- economic conditions determine spending patterns by consumers, businesses, and governments
Competitive Environment
- marketers must convince buyers to buy their product rather than that of another's
Substitute Products - A product that is dissimilar from those of competitors but that can fulfill the same
Brand Competition - Competitive marketing that appeals to consumer perceptions of similar products
Strategy: The Marketing Mix
Marketing Managers - Managers responsible for planning and implementing all the marketing-mix activities that result
in the transfer of goods or services to customers
Marketing Plan - A detailed strategy for gearing the marketing mix to meet consumer needs and wants
Marketing Mix - Also known as the "Four Ps" - The combination of product, price, place, and promotion strategies used
in marketing a product
Product - A good, service, or idea that satisfies buyers' needs and demands
Product differentiation - The creation of a product or product image that differs enough from existing
products attract consumers
Price - The part of the marketing mix concerned with choosing the appropriate price for a product to meet the
firm's profit objectives and buyers' purchasing objectives
Place - (Distribution) The part of the marketing mix concerned with getting products from the producer to the
buyer, including physical transportation and choice of sales outlets
Promotion - Techniques for communicating information about products
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