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ADM2320_NOTES.docx

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Department
Administration
Course
ADM2320
Professor
All Professors
Semester
Fall

Description
Chapter 1Overview of MarketingWhat is MarketingMarketing A set of business practices designed to plan for and present an organizations products or services in ways that build effective customer relationshipsMarketing plan A written document composed of an analysis of the current marketing situation opportunities and threats for the firm marketing objectives and strategy specified in terms of the four Ps action programs and projected or pro forma income and other financial statementsMarketing is about Satisfying Customer Needs and WantsNeed A person feeling physiologically deprived of basic necessities such as food clothing shelter and safetyWant The particular way in which a person chooses to satisfy a need which is shaped by a persons knowledge culture and personalityMarket Refers to the groups of people to whom an organization is interested in marketing its products services or ideasTarget market The customer segment or group to whom the firm is interested in selling its products and services potential customers who have both an interest in the product or service and an ability to buyMarketing Entails Value ExchangeExchange The trade of things of the value between the buyer and the seller so that each is better off as a resultMarketing mix four Ps Product price place and promotionthe controllable set of activities that a firm uses to respond to the wants of its target marketsProduct Creating Value One main purpose of marketing is to create value by developing a variety of offerings including goods services and ideas to satisfy customer needsGoods Items that can be physical touchedService Intangible customer benefits that are produced by people or machines and cannot be separated from the producerIdeas Include thoughts opinions philosophies and intellectual conceptsPrice Transacting Value Marketers must determine the price of a product carefully on the basis of the potential buyers belief about its valuePrice The overall sacrifice a consumer is willing to makemoney time energyto acquire a specific product or servicePlace Delivering Value The third P place describes all the activities necessary to get the product from the manufacturer or producer to the right consumerPromotion Communicating Value Even the best products and services will go unsold if marketers cannot communicate their value to customersMarketing is Shaped by Forces and Players External to the FirmExternal forces such as social technological economic competitive and regulatory changes shape a companys marketing activitiesAs well a firms relations with suppliers distributors other intermediairies eg financial institutions advertising agencies market research firms and advocacy groups eg Greenpeace PETA affect its marketing decisionsMarketing Can Be Performed by Both Individuals and OrganizationsB2C businesstoconsumers The process in which the businesses sell to consumersB2B businesstobusiness The process of selling merchandise or services from one business to anotherC2C consumertoconsumer The process in which consumers sell to other consumersMarketing Occurs in Many SettingsMost people think of marketing as a way for a firm to make profits but marketing works equally well in the nonprofit sectorIn addition marketing isnt useful only in countries with welldeveloped economies It can also jumpstart the economies of less developed countries by actually putting buyers and sellers together to create new marketsMarketing is often designed to benefit an entire industry which can help many firms simultaneouslyMarketing Helps Create ValuethProductionOriented Era Around the turn of the 20 century most firms were production oriented and believed that a good product would sell itself Manufacturers were concerned with product innovation not with satisfying the needs of individual consumers and retail stores typically were considered places to hold merchandise until a consumer wanted it Productoriented companies focus on developing and distributing innovative products with little concern whether the products best satisfy customers needsSalesOriented Era Between 1920 and 1950 production and distribution techniques became more sophisticated however the Great Depression and World War II conditioned customers to consume less As a result manufacturers turned had the capacity to produce more than customers really wanted to buy Firms found an answer to their overproduction in becoming sales oriented they depended on heavy doses of personal selling and advertising Marketing was essentially reduced to a selling function where companies try to sell as much as possible of the products they make rather than focus on making products consumers really wantMarketOriented Era After World War II soldiers returned home got new jobs and started families At the same time manufacturers turned from focusing on the war effort and toward consumer products Suburban communities sprouted up around the country and the new suburban fixture the shopping centre began to replace cities central business districts and the hub of retail activity and a place to just hang out Some products once in limited supply because of World War II became plentiful Canada entered a buyers marketthe customer became king When consumers again had choices they were able to make purchasing decisions on the basis of factors such as quality convenience and price Manufacturers and retailers thus began to focus on what consumers wanted and needed before they designed made or attempted to sell their products and servicesValueBased Marketing Era Most successful firms today are market oriented That means they have gone beyond a production or selling orientation and attempt to discover and satisfy their customers needs and wants Better marketing firms recognized that there was more to good marketing than simply discovering and providing what consumers wanted and needed to compete successfully they would have to give their customers greater value than their competitorsValue Reflects the relationship of benefits to costs or what the consumer gets for what he or she givesWhat is ValueBased MarketingValuebased marketing Marketing that focuses on providing customers with benefits that far exceed the cost money time effort of acquiring and using a product or service while providing a reasonable return to the firmHow Firms Compete on the Basis of ValueIn todays quickly changing world consistently creating an delivering value is quite difficult Consumer perceptions change quickly competitors constantly enter markets and global pressures continually reshape opportunitiesHow Do Firms Become Value DrivenFirms become value driven by focusing on three activities1They share information about their customers and competitors across their own organization and with other firms that might be involved in getting the product or service to the marketplace such as manufacturers and transportation companies2They strive to balance their customers benefits and costs3They concentrate on building relationships with customersTransactional orientation Regards the buyerseller relationship as a series of individual transactions so anything that happened before or after the transaction is of little importanceRelational orientationMethod of building a relationship with customers based on the philosophy that buyers and sellers should develop a longterm relationshipCustomer relationship management CRM A business philosophy and set of strategies programs and systems that focus on identifying and building loyalty among the firms most valued customersWhy is Marketing ImportantExpands firms global presencePervasive throughout the organizationPervasive across the supply chainMakes life easier and provides employmentEnriches societyCan be entrepreneurialMarketing Expands Firms Global PresenceWithout the knowledge that can be gained by analyzing new customers needs and wants on a segmentbysegment regionbyregion basisone of marketings main tasksit would be difficult for a firm to expand globallyMarketing is Pervasive across the OrganizationIn valuebased marketing firms the marketing department works seamlessly with other functional areas of the company to design promote price and distribute productsMarketing is Pervasive across the Supply ChainSupply chain The group of firms that make and deliver a given set of goods and services
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