JHE 376 – Section 1 on October 18 5:30-6:30pm
Each chapter has equal weightage.
• Creating value and utility – Utility is a want satisfying power of a good or service.
o Definition of marketing – An organizational function and a set of
Creating, communication and delivering value to customers;
Managing customer relationships in ways that benefit the
organization and its stakeholders.
• Types of utility
o 4 utilities:
Form utility – conversion of raw materials and components into
finished goods or services. Example; with some plastic, metal and
glass, Nikon creates a digital camera and Samsung creates a laptop.
Time utility – Availability of goods and services when consumers
want them. Example; Cavities – today I am in pain from a cavity,
and therefore I need to the goods or services today and not later to
Place utility – Availability of goods and services at convenient
locations. Example; McDonalds, I am hungry and therefore I will
get McDonalds because its right there when I’m hungry.
Ownership (possession) – Ability to transfer title to goods and
services from marketer to buyer. Example; Luxury car, I can have
any car to travel around but instead I want a Mercedes-Benz.
• Globalization impacting marketing
o 3 main points of globalization;
Increase in international trade agreements;
Growth of electronic business;
Interdependence of the world’s economies.
o Companies seek the most efficient manufacturing sites and most lucrative
o Companies are tailoring their goods and services to the needs and
preferences of local markets.
• Four eras of marketing (transitions and years)
o Prior to 1920 – Production Era Concept; if you are good at what you do,
people with will come to you for your goods and services. This happened because cities were small and therefore only 2-3 producers.
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
o Prior to 1950 – Sales Era Concept; people don’t want to buy non-essential
things. You need to go to the people and convince them that they should
buy the product you’re trying to sell.
Sales orientation – Customers will resist purchasing non-essential
Task of personal selling and creative advertising is to persuade
them to buy.
o Since to 1950 – Marketing Era Concept; there were more producers than
customers, therefore every producer was trying to convince consumers to
buy from them as opposed to their competitors.
Shifting from a seller’s market to a buyer’s market (i.e., from Sales
era to marketing era).
Strong buyer’s market created the need for consumer orientation.
Emergence of marketing concept – a companywide consumer
orientation to achieve long-run success.
A strong market orientation improves market success and overall
o Since 1990 – Relationship Era Concept; trying to build strategic alliances
in order to further their profits from consumers.
Relationship marketing – developing long-term, value-added
relationships over time with customers and suppliers.
Strategic alliances and partnerships benefit everyone.
• Needs, wants and marketing myopia
o Needs – Consumers acquire goods and services on a continuing basis to
fill certain needs. To convert needs into wants, marketers need to:
Focus on the benefits of goods and services;
Should listen to consumer needs.
o Marketing myopia – when businesses don’t realize the scope of their
business. More myopic when you focus on products and not consumers.
Management’s failure to recognize the scope of its business.
Focusing on customer need satisfaction can overcome myopia.
o Company -> Myopic Description -> Company
Motto (Avoiding Myopia):
o Ex1. Nokia -> A cell phone manufacturing ->
“Connecting People” o Ex2. Visa -> A credit card company -> “Life Takes
o Ex3. Purolator -> A courier company -> “Where
Business Is Going”
• Non-traditional marketing
o Person Marketing – Marketing efforts designed to cultivate the attention
and preference of a target market toward a person. Example; Athlete Steve
Nash, Political Leader Stephen Harper and Celebrity Nelly Furtado.
Focus on marketing of fictional characters, celebrities and
o Place Marketing – Marketing efforts designed to attract visitors to a
particular area; improve consumer images of a city, province or country;
and/or attract new business. Examples; Saskatchewan “Land of Living
Skies,” Nova Scotia “Canada’s Ocean Playground,” and Manitoba
Focus on marketing places as tourist attractions, and business
o Cause Marketing – Identification and marketing of a social issue, cause,
or idea to selected target markets. Examples; “Reading is fundamental,”
“Friends don’t let friends drive drunk,” and “Be a mentor.”
Identification and marketing of a social issue, cause or idea to
selected target markets.
Many profit seeking firms link their products to social causes.
Strong support among customers and employees for the cause-
o Event Marketing – Marketing of sporting, cultural, and charitable
activities to selected target markets. Examples; Grey Cup, 2010
Vancouver Winter Olympics, and Calgary Stampede.
Marketing of sporting, cultural, and charitable activities to
selected target markets.
o 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.
Examples; United Way “Without you, there would be no way,” Canadian
Red Cross “ Anywhere. Anytime.,” Sierra Club “Explore, enjoy, and
protect the planet.”
Attempts to influence others by:
• Accepting the organization’s goals;
• Receiving its services;
• Contributing in some way.
Used to raise funds by selling licensed merchandise.
• Relationship marketing
o Gives a company new opportunity to gain a competitive edge by moving
customers up the loyalty ladder. It starts with determining what customers needs and want, then
developing high-quality products a to meet those needs.
• Advocates vs. new
• Interactive and Mobile
o Mobile Marketing –
marketing – Buyer-
which the customer
controls the amount
and type of
• Social and Buzz marketing
o Buzz Marketing –
messages that bridge the gap between a company and its products.
o Social Marketing – The use of online social media as a communications
channel for marketing. i.e, social media like Twitter.
• Ethics and Social responsibilities
o Ethics – moral standards of behaviour expected in a society.
Most businesses follow ethical practices, although there have been
breaches at times.
o Social Responsibility – Marketing philosophies, policies, procedures, and
actions whose primary objective is to enhance society.
• Costs and Functions of Marketing; Chapter 2
• Planning – Anticipating future events and conditions and determining the best
way to achieve organizational objectives.
o Continuous process; creates a blueprint and checkpoints for everyone in
• Marketing Planning – Implementing planning activities devoted to achieving
o Many planning activities take place over the Internet with virtual
o An important trend in marketing planning centers on relationship
• Strategic and Tactical Planning
o Strategic Planning;
Determining organization’s primary objectives.
Adopting courses of action that will achieve these objectives.
Addresses long-term actions.
o Tactical Planning;
Guides the implementation of activities specified in the strategic
Addresses shorter-term actions.
Swift decision-making and actions.
o Third Type of Planning – Operational Planning. • Mission Statement – Essential purpose that differentiates one company from
o Example; Microsoft Office “Real life tools”
• Vision Statement – Guide the development of marketing objectives and plans.
o Example; Generate 12% more profit next year.
• Porters 5 Force Model;
o Threat of new entrants;
o Bargaining power of buyers;
o Bargaining power of suppliers;
o Threat of substitute products;
o Rivalry among competitors. • SWOT Analysis (Vulnerability, Constraints (when you’re not able to use the
opportunity you are not able because of your weakness), leverage and problems)
o Helps planners compare internal organizational strengths and weaknesses
with external opportunities and threats. • Strategic window
o Limited periods when key requirements of a market and a firm’s particular
competencies best fit together.
o Requires a thorough analysis of;
Current and projected external environmental;
Current and projected internal company capabilities;
How, whether, and when the firm can reconcile environmental
conditions and company capabilities.
• First mover and second mover strategy
o First Mover Strategy – the Company first to offer a product in a
marketplace will be the long-term market winner.
o Second Mover Strategy – Observing the innovations of first movers and
then improving on them to gain advantage in the marketplace.
Which are more risker and which is profitable? First Mover
• Marketing strategy – target market mix (4P) o Target Market
The group of people toward whom the firm directs its marketing
efforts and merchandise.
• Example; Bombardier markets most of their products to
Diversity plays a critical role.
• Example; The growing diverse communities in Canada
Targeting consumers in specific global markets represents a
challenge and an opportunity.
• Example; Sears different return policy in the US, Canada
o Marketing Mix
Blending of the four strategy elements to fit the needs and
preferences of a specific target market.
• Product – Deciding what goods or services the firm should
offer to a group of consumers.
• Distribution – Consumers find their products in the paper
quantities at the right times and places. Involves modes of
transportation, warehousing, inventory control, order
processing, and selection of marketing channels.
• Promotion – Communication link between sellers and
buyers. Firms may communicate messages (directly
through salespeople, or indirectly through advertisements
and promotions). Many companies use integrated
marketing communications (IMC).
• Pricing – Methods of setting profitable and justifiable
prices. Subject to regulation and public scrutiny. A good
pricing strategy (1) created value for customers, and (2)
builds and strengthens customer relationships with a firm
and its products.
• Rule of Three – the three strongest, most efficient companies dominate 70 and 90
percent of a market. Examples; telecommunication companies such as Rogers,
Bell and Telus.
• BCG Analysis – A market share/market growth matrix that plots market share
against market growth potential. Developed by the Boston Consulting Group.
o Stars – Generate considerable income (strategy is to invest more funds for
o Question Marks – Have potential to become stars or cash cows (strategy
is to invest into more funds or consider disinvesting).
o Cash Cows – Generate strong cash flow (strategy is to milk profits to
finance growth of stars and question marks).
o Dogs – Generate little profits (strategy is to consider withdrawing). • Market
Penetration – Is a strategy that company uses when it attempts to build market
share by selling existing products to existing customers. Example; When Tim
Horton’s promotes its Roll up the Rim contest; it is following a market
• Market Development – Occurs when a company tries to attract new customers
for its existing products, sometimes by geographic expansion, but often by simply
targeting new segments of customers. Example; When McCain Foods entered the
African market to sell its frozen French fries; it was following a market
• Product Development – Occurs when a company develops new products that it
hopes to sell to existing customers. Example; When KFC Canada introduced the
Double Down, it was following a product development strategy.
• Diversification – Is the most risky of growth strategies as companies that follow
this strategy attempt to sell new products to new markets – that is they have little
experience with either. Example; When Zippo Manufacturing introduced a new
cologne; it was following a diversification strategy.
• Environmental scanning – Collecting external marketing environment information
to identify and interpret potential trends. Trends may represent significant
opportunities or threats to the company.
o Technological Environment – Application of knowledge based on
discoveries in science, inventions and innovations to marketing.
Technology leads to (1) new products, (2) improvements in existing
products, (3) better customer service and (4) reduced prices.
Technology addresses social concerns. Sources of technology
include; (1) industry, (2) educational institutions, (3) not-for-profit
institutions and (4) federal government. VoIP – Voice over Internet Protocol is the alternative to traditional
IMS – Internet Protocol Multimedia Subsystem will offer new
opportunities to marketers.
o Political-Legal Environment – Consists of laws and their interpretation
that require firms to operate under competitive conditions and to protect
Government Regulation –
• Competition Act – comprehensive legislation administered
by Industry Canada and designed to help both consumers
and businesses by promoting a healthy competitive
environment. Laws roughly categorized in three marketing
• Consumer Protection Act (Cooling off Act) or Direct
Seller Act – Provincial laws generally focused on
protection of buyers and sellers with respect to direct sales
• Canadian Radio-Television and Telecommunications
Commission (CRTC) – regulates and supervises all
aspects of the Canadian broadcasting system.
• National Energy Board (NEB) – regulates the
construction and operation of interprovincial and
international pipelines and power lines.
• People for the Ethical Treatment of Animal (PETA)
• ASC – Advertising Standards Canada
• MADD – Mothers Against Drunk Driving
o Competitive Environment – interactive process that occurs in the
marketplace among (1) marketers of directly competitive products, (2)
Marketers of products that can be substituted for one another, and (3)
Marketers competing for the consumer’s purchasing power.
Marketing decisions by individual firms influence (1) Consumer
responses in the marketplace and (2) marketing strategies of
o Social-Cultural Environment – The relationship between the marketer,
society and culture. Marketers must be sensitive to demographic shifts and
o Economic Environment – Factors that influence consumer buying power
and marketing strategies.
Gross Domestic Product – Sum of all goods and services
produced by a nation in a year. Business Cycle – Pattern of stages in the level of economic
• 1. Prosperity – Consumer spending is brisk; growth in
• 2. Recession – Consumers focus on fundamental products.
• 3. Depression – Consumer spending sinks to its lowest
• 4. Recovery – Consumer purchasing power increases.
• Inflation – Devaluates money by reducing the products it
can buy through persistent price increases.
• Deflation – Can cause (1) a free-fall in business profits, (2)
lower returns on most investments, and (3) widespread job
• Unemployment – Proportion