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Management (MGT)
Chris Bovaird

Chapter 5: Understanding Marketing Processes & Consumer Behaviour WHAT IS MARKETING -marketing: planning and executing the development, prices, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy both buyers and sellers objectives -our needs and wants are the forces that drive marketing -marketing concept: the idea that the whole firm is directed toward serving present and potential customers at profit -this concept means that a firm must get to know what customers really want -various departments of the firm (marketing, production, finance, and human resources) must operate as a system -the system should be well coordinated and unified in reaching its common goalcustomer satisfaction Providing Value and Satisfaction -consumers buy products that offer the best value when it comes to meeting their needs and wants Value and Benefits -value: relative comparison of a products benefits versus its costs -benefits of a higher value product are much greater than its cost -benefits include the function of the product, emotional satisfactions, experiencing, and possessing it -cost includes sales price, expenditure of the buyers time, and emotional cost of making a purchase decision Value= Benefits Cost -marketing strategies focus on interesting value for customers -adding value to products to satisfy customers needs and wants may mean: 1) developing an entirely new product that performs better (provides greater benefits) 2) having a store open extra hours during a busy season (provides benefits of shopping convenience 3) price reductions (benefits of a lower cost) 4) informational promotion explaining how a product can be used in new ways www.notesolution.comValue and Utility -utility: the ability of a product to satisfy a human or need -marketing strives to provide four kinds of utility: 1) time utility: it makes products available when consumers want them (season wise) 2) place utility: it makes products available where customers can conveniently purchase them (seasonal departments, example: Christmas department) 3) ownership utility: by conveniently transferring ownership from store to customer 4) form utility: by turning raw materials into finished goods; by making products available in the first place Goods, Services, and Ideas -consumer goods: products purchased by individuals for their personal use -firms that sell 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 -examples: surgical instruments, earthmovers, unformed plastic -firms that sell products to other manufactures are engaged in industrial marketing -services: intangible products, such as time, expertise, or an activity that can be purchased -marketers also promote ideas -television ads and other ads remind us and stress the importance of things, such as the importance of drinking sober Relationship Marketing -relationship marketing: a type of marketing that emphasizes lasting relationships with customers and suppliers -stronger relationshipsincluding economic and social tiescan result in greater long term satisfaction and customer loyalty -banks offer economic incentives to encourage longer lasting relationships with customers -customers who purchase more of a banks products are offered reduced-price services, and discounts The Marketing Environment -marketing plans, decisions, and strategies are not determined by any business nor experienced marketers -they are strongly influenced by powerful outside forces
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