ADMS 2200 Lecture Notes - Strategic Alliance, Marketing Myopia, Marketing Strategy

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Lecture 1
ADMS 2200
Chapter 1
Marketing: The Art and Science of Satisfying Customers
What is Marketing?
Production and marketing together create utility.
Utility Want-satisfying power of a good or service.
Four Types of Utility:
1. Form (Production) Conversion of raw materials and components into finished goods and
services. I.e. iPod, Shirt from Mark’s Work Wearhouse
2. Time (Marketing) Availability of goods and services when consumers want them. I.e. Dental
appointment, digital photographs
3. Place (Marketing) Availability of goods and services at convenient locations. I.e. Soft-drink
machines outside gas stations; on-site day care; banks/atm in grocery stores
4. Ownerships (Possessions) (Marketing) Ability to transfer title to goods or services from
marketer to buyer. I.e. Retail sales (in exchange for currency or credit-card payment)
o Organizations must create utility and customers to survive.
o Activities marketers perform to create customers:
o Identifying customer needs
o Designing products to meet those needs
o Communicating information
o Making the products available when and where customers want them
o Pricing merchandise and services
o Providing service and follow-up
Marketing An organizational function and a set of processes for:
o Creating, communicating, and delivering value to customers
o Managing customer relationships in ways that benefit the organization and its
stakeholders
Today’s Global Marketplace
o Factors that have extended economic views
o Increase in international trade agreements
o Growth of electronic business
o Interdependence of the world’s economies
o Companies seek the most efficient manufacturing sites and most lucrative markets
worldwide.
o Companies are tailoring their marketing efforts to the needs and preferences of local
markets.
Four Eras in the History of Marketing
Exchange process- Activity which two or more parties give something of value to each other
to satisfy perceived needs
The Production Era
Production orientation Stressing efficiency in producing a quality product, with the
attitude toward marketing that “a good product will sell itself”
Characterized by production shortages and intense consumer demand
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The Sales Era
Sales orientation Customers will resist purchasing nonessential items.
Task of personal selling and creative advertising is to persuade them to buy
The Marketing Era and the Emergence of the Marketing Concept
o Shift from a seller’s market to a buyer’s market
o Strong buyer’s market created the need for consumer orientation.
o Emergence of marketing concept A companywide consumer orientation to achieve long-
run success
o A strong market orientation improves market success and overall performance.
The Relationship Era
Relationship marketing Developing long-term, value-added relationships over time with
customers and suppliers
Strategic alliances and partnerships benefit everyone.
Converting Needs to Wants
o Consumers acquire goods and services on a continuing basis to fill certain needs.
o To convert needs into wants, marketers:
o Focus on the benefits of goods and services
o Require skill
o Should listen to consumer needs
Avoiding Marketing Myopia
o Marketing myopia Management’s failure to recognize the scope of its business
o Focusing on customer need satisfaction can overcome myopia
Marketing in Not-for-Profit Organizations
o Operate in both the public and private sector
o Adopt marketing strategies to meet service objectives
o Communicate their messages by appearing in advertisements relating to their goals
o Form alliances with for-profit firms to promote each other’s causes
Characteristics of Not-for-Profit Marketing
o Focus is to generate revenue to support their causes and not on the bottom line
o May market tangible goods and services
o Markets to multiple audiences
o Often possess some degree of monopoly power in a given geographic region
o Service users have less control over the firm’s future
Person Marketing Focus on marketing of fictional characters, celebrities, and political
candidates
o Marketing efforts designed to cultivate the attention and preference of a target
market toward a person. I.e. Steve Nash, Nelly Furtado, Stephen Harper
Place Marketing - Focus on marketing places as tourist attractions, business locations
o Marketing efforts designed to attract visitors to a particular are; Improve consumer
images of a city, province or country; and/ or attract new business. I.e. Nova Scotia:
Canada’s Ocean Playground, Saskatchewan: Land of Living Skies
Cause Marketing Identification and marketing of a social issue, cause or idea to selected
markets. I.e. “Reading is fundamental”, “Friends don’t let their friends drive drunk”, “Be a
mentor”
o Many profit-seeking firms link their products to social causes
o Strong support among customers and employees for cause-related marketing
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Event Marketing Marketing of sporting, cultural, and charitable activities to selected target
markets. I.e. Grey cup, Super bowl, 2010 Vancouver Olympics, Calgary Stampede, Toronto
Caribanna
Organization Marketing - Marketing efforts of mutual-benefit organizations, service
organizations, and government organizations that seek to influence others to accept their
goals, receive their services, or contribute to them in some way.
Attempts to influence others:
o Accept the organization’s goals
o Receive its services
o Contribute in some way
o Used to raise funds by selling licensed merchandise
From Transaction-based Marketing to Relationship Marketing
o Transaction-based marketing Buyer and seller exchanges characterized by limited
communications and little or no ongoing relationships between the parties
o Marketers realize that consumers are becoming more and more sophisticated.
o Relationship marketing Gives a company new opportunities to gain a competitive edge
by moving customers up a loyalty ladder
o It starts with determining what customers need and want, then developing high-quality
products to meet those needs.
Using Interactive and Social Marketing to Build Relationships
Mobile Marketing Marketing messages transmitted via wireless technology
Interactive marketing Buyer-seller communications in which the costumer controls the
amount and type of information received from a marketer.
Social marketing The use of online social media as a communications channel for
marketing messages
Buzz marketing Word-of-mouth messages that bridge the gap between a company and its
products
Developing Partnerships and Strategic Alliances
o Relationship marketing extends to business-to-business relationships with suppliers,
distributors, and other partners.
o Strategic alliances Provide firms competitive advantage
o Forms of alliances:
o Product development partnerships
o Vertical alliances
Eight Universal Marketing Functions
1. Buying - Ensuring product offerings are available in sufficient quantities to meet customer
demands
2. Selling - Using advertising, personal selling, and sales promotions to match products to customer
needs.
3. Transporting Moving products from their point of production to locations convenient for
purchasers.
4. Storing Warehousing products until needed for sale.
5. Standardizing and Grading Ensuring product offerings meet quality and quantity controls of size,
weights, and other variables.
6. Financing Providing credit for channel members (wholesalers and retailers) and consumers.
7. Risk Taking Dealing with uncertainty about future purchases.
8. Securing Marketing Information Collection information about consumers, competitors, and
channel members for use in making marketing decisions.
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