Lecture 6: Marketing
Productivity and Quality:
•Productivity: minimizing ratio of inputs (labour, parts, etc.) to outputs (finished products).
•In other words: making a product quickly, efficiently and cheaply.
•Productivity: ratio of inputs (hours of labour or numbers or parts, dollars worth of
parts) gone in to make a finishing product. A firm minimizing the amount of parts
and investment that goes into a product. Canadian economy is less productive than
the US economy at least 20%. Average worker turns out less than 20% of the
American worker. His maybe because; Canadian managers don’t invest on, on the job
training, don’t invest in capital equipment (machinery), American managers are
prepared to try new interesting technologies.
•Quality: making a product that us fit for use
•In other words: making a product that works as it should
Quality: giving the customer what they are expecting; what they want; the product
they think they are paying for. Making a product that is going to work like it’s
supposed to. Example of Quality: (Honda recall- air bags don’t work); Toyota’s:
breaks do not work, had to do a recall. Shares slide as reputation loses steam
(headlines). High quality reliable vehicles known as, pay a little more than the US
vehicles but it is worth it. If you sell cars that do not work, and when customers get
disappointed; sales of Chevy cobalt have increased to about 149.7 % and Toyota`s
have fallen gone into the negative percentages. Have to go back to factory and
repairing product if makes a mistake, reputation takes a major hit.
Marketing: Target Markets & Market Segmentation
-Well managed businesses:
-Do not sell what they have (product focus)
-Sell what customers want (customer focus)
-Focus on customer is called the `marketing concept`
business: and organized to make or supply or produce something which you then try and
sell to customers with a view towards making a product.
Doesn’t sell what it think you should have, it tries and sells what you want, what you
think you need, what you think should be useful. That is preoccupying yourself with he
customer, well managed business asks what you want, and what you need. Customer focus.
-The Business is directed towards serving existing and potential customers, while
-No business has ultimate time
-No business has ultimate resources
-No business can sell to everybody
-Marketing Begins with determining: Who is the target market?
-The specific group of people the business targets as the most likely/intended customers
-People with similar needs and wants
People who do not have teeth cannot buy tooth paste. People who cannot read will not buy
text books. People who are vegetarians will not buy meat. There will always buy people who
will not buy your product. An intelligent business man realizes you can’t be all things to all
people. Giving my customer what they wants/need/what they tell us they want begins with
question. Identify ages, gender, what people are interested in ect., concentrate efforts to
specific groups of people
-Marketers divide world into smaller and smaller groups of similar people.
-People whose needs, wants, attitudes to product likely to be similar
-Called `Market Segmentation`
-Some ways markets can be segmented:
-Demography: external traits
-Psychography: Internal traits
-Geography: where people live
-Demography- a person`s external traits:
-age, gender, race income; for example Kraft dinner
Study of population, external characteristics, how old people are, break down of income,
Divide up world by concentrating on; let’s try and sell a product to 18- 25 year olds, lets try
and talk to people under 15 so we can see what they need, let’s see what females want
oppose to men, or look at things in case of religion, rich the poor, the hopes the dreams of
people in middle income. There are products that are pitched at you and there are products
are pitched at me, different incomes, people buy bubble. Prof Drinks scotch whiskey. East
Asians are more likely to have bubble tea. (Canadaian born Chinese CBC). Pacific mall;
pirated DVDs. Kraft Dinner: sort of people who buy this are not super wealthy, fairly
limited income, sell to people who are in a hurry and are busy, quick and filling, eat for
convince instead of making a gourmet food.
•Psychography - a person`s internal traits
-Beliefs, values, motivations. Example: Political parties, charities.
Inside brain, hearts, guts. Identify people who have common belief systems, common
values and common motivations. Products that pitch to people who see them see as tree
hugging nature folks. People who have strong religious beliefs. Political parties; try and
reach people and influence them, and go after people who wish to do the same thing.
Watching TV and political advertisement comes on, they tell you things you want to hear
and they target families in the same situation. Vote for specific Party because they well you,
you are hard working, responsible, discipline, and think that paying a a whole bunch of
extra taxes are wasteful and so they vote for that specific party. Different parties say
different things, Stefan Harper, Jack latan. Pitching message to different types of people.
Geographic Segmentation- where people live
-Region, rural vs. Urban, climate. For example: Quebec vs. Rest of Canada.