Midterm Review.docx

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University of Toronto Scarborough
Management (MGM)
Alison Jing Xu

MGTB04H3 Lecture 01 Midterm Review 1. Introduction to Marketing Chapter 1 marketing is a process of determining customer needs and wants and then developing a product to satisfy them and still yield a satisfactory profit; it is externally focused. Value Creation Process selling is producing a product and then trying to persuade customers to purchase it; it is internally focused. marketing mix a set of marketing tools that work together to satisfy customer needs and build lasting customer relationships. product, price, place, promotion needs are the basic human requirements; people need food, air, water, clothing, and shelter to survive. People also have strong needs for creation, education, and entertainment. Hobbies, travel education Self-Actualization; self- U.S. ArmyBe all you can be. fulfillment, enriching experiences Cars, furniture, cc, stores, Ego Needs; prestige, status, Royal Salute ScotchWhat the rich give country clubs, liquors accomplishment the wealthy. Clothing, grooming products, Belongingness; love, friendshPepsiYoure in the Pepsi generation. clubs, drinks acceptance by others Insurance, alarm systems, Safety; security, shelter, Allstate InsuranceYoure in good hands retirement, investments protection with Allstate Medicine, staple items, genericssiological; water, sleep, Quaker Oat BranIts the right thing to do. - the needs become wants when they are directed to specific objects that might satisfy the need o shaped by culture and individual personality o demands are wants for specific products backed by an ability to pay any people want a Mercedes; only a few are willing and able to buy one - fundamental difficulty #1: people do not really know their needs and desires o is Apple what you really want? - fundamental difficulty #2: who are the consumers? - willingness to pay, ability to pay, decision power share of customer is the portion of the customers purchasing that a company gets in its product categories. (profits) customer equity is the total combined customer lifetime values of all the companys customers. Customer Relationship Levels and Tools - low-margin customers: P&G creates relationships through brand-building advertising, sales promotions, and its website - high-margin customers: sellers want to create full partnerships with key customers; P&G works with Wal-Mart and other large retailers - companies are developing customer loyalty and retention programs o frequency marketing programs reward customers who buy frequently or in large amounts (airlines offer frequent-flyer programs, hotels give room upgrades to frequent guests, supermarkets give patronage discounts to very important customers) o club marketing programs offer members special benefits and create member communities - companies can do the following to build customer relationships: o structural ties supply customers with special equipment or online linkages to help manage orders, payroll, or inventory o financial and social benefits saving money through plans and building networks The Changing Nature of Customer Relationships - yesterdays big companies focused on mass marketing; few practice it now - todays companies are building deeper, more direct, and lasting relationships with selected customers - selective relationship management: many companies now use customer profitability analysis to weed out losing customers to target winning ones for pampering; create attractive offers and special handling to capture and earn their loyalty o Best Buys customer-centricity strategy; embrace the angels while ditching the demons o angels purchase without markdowns or rebates, while demons are bargain-hungry shoppers o angels: digital photo centre, Geek Squad, computer assistance, RZ loyalty program Barrys (high income men), Jills (suburban moms), Buzzes (male tech enthusiasts), Rays (young family men on a budget), and small business owners o demons: removed from marketing lists, reduced promotions and sales, 15% restocking feeMGTB04H3 Lecture 01 Midterm Review - relating more deeply & interactively: communication tools such as social media; marketing by attractioncreating market offerings and messages that involve consumers rather than interrupt them o must build brand community through in-person events and other activities o consumer-generated marketing marketing messages, ads, and other brand exchanges by consumers themselvesboth invited and uninvited. Partner Relationship Management partner relationship management working closely with partners in other company departments and outside the company to jointly bring greater value to customers. - partners inside the company; every employee must be customer-focused o P&G assigns Customer development teams to each of its major retailer accounts - partners outside the firm; building better relationships with suppliers, channel partners, competitors The Changing Marketing Landscape - the digital age: learn and track customers and to create G&S tailored to individual customer needs o communicate in large groups or one-to-one; web videoconferencing o create detailed customer databases and use them to target individual customers o digital tech take marketing content to wherever they go and share it with friends o Web 2.0 a more reasoned and balanced approach to marketing online offers a fast-growing set of new Web tech for connecting with customers (i.e. through blogs, vlogs, social media, video-sharing) click-only dot-coms; brick-and-mortar companies have become click-and-mortar - rapid globalization: marketers are now connected globally with their customers and partners o companies are buying more supplies and components abroad o taking a global view of the companys industry, competitors, and opportunities - ethics & CSR: re-examining relationships with social values and responsibilities o there is an unwritten contract between customers and brands they buy o companies such as Patagonia, Ben & Jerrys, and Timberland are practicing caring capitalism; backing words with action - the growth of not-for-profit marketing: in the past, most widely applied in the for-profit business sector o the not
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