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study guide

13 Pages
114 Views

Department
Management (MGT)
Course Code
MGTA02H3
Professor
Chris Bovaird

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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.com
Value 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 relationships—including economic and social ties—can 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
www.notesolution.com
-external environment: outside factors that influence marketing programs by posing
opportunities or threats
-five of these environmental factors are: political/legal, social/cultural, technological, economic,
and competitive environments
Political and Legal Environment
-political activities (foreign and domestic) have intense effects on business
-legislation on the use of cellphones in cars can determine the destinies of entire industries
-marketing managers try to maintain favourable political/legal environments in several ways
-in gaining public support, marketing uses advertising campaigns for public awareness on
important issues
-lobby and contribute to political candidates for support
-such activities result in favourable laws and regulations, causing the opening of new internal
business opportunities
Social and Cultural Environment
-issues reflect the values, beliefs, and ideas that form the fabric of Canadian society today
-we continue to insist on agreener” Canada, we have seen the fall of Freon in air conditioners
and increased reliance on recycling materials in the goods we consume
-changing social values force companies to develop and promote new products for both
individual consumers and industrial consumers
-example, Dot-com sites collect personal information but consumers want privacy
-therefore there has been a growing demand for better privacy protection
Technological Environment
-they create new goods and services such as satellite dishes
-new products make some existing products obsolete (example, compact discs are replacing
audiotapes
-they often stimulate new goods and services not directly related to the new technology itself
-cell phones are not only used for business communication, for also for recreation and leisure
-DNA fingerprinting is a product
-it involves marketing decisionssuch as pricing and promotion
Economic Environment
-determine spending patterns by consumers, businesses, and governments
-markets are mostly concerned with inflation, interest rates, recession, and recovery
www.notesolution.com

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Description
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 www.notesolution.com
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