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University of Toronto St. George
Rotman Commerce
John Oesch

Chapter 15 Marketing: process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals Consumers needs and wants are the forces that drive marketing Marketing concept: idea that the whole firm is coordinated to achieve one goal, that is to serve its present and potential customers and to do so at a profit o Firms must get to know that customers really want and follow closely the changes in tastes that occur o Various departments of the firm like marketing, production, finance, and human resources must operate as a well coordinated and unified system to satisfy customers Value: relative comparison of a products benefit vs. cost o Value= benefit / costs o Benefits include functions of the product as well as the emotional satisfactions associated with owning, experiencing, or possessing it o Costs include sales price, expenditure of the buyers time, and the emotional costs of making a purchase decision Marketing strategies focus on increasing values for customers Marketing resources are deployed to add value to products to satisfy customers needs and wants o Satisfying customers includes developing a new product, keeping the stores open longer, offering better prices, and informational promotion that explains how a product can be used in new ways Utility: ability of a product to satisfy a human want or need o Marketing strives to provide four kinds of utility Time utility: it makes products available when consumers want them (i.e. opening stores for longer during holidays) Place utility: it makes products available where customers an conveniently purchase them Ownership utility: allows for convenient transfer of ownership from store to customer (i.e. the store sells specific items which are hard to find elsewhere) Form utility: making products available in the first placeby turning raw materials into finished products Consumer goods: products that consumers buy for personal use Firms that sell consumer goods are engaged in consumer marketing Industrial goods: products used by companies to produce other products Firms that sell industrial goods are engaged in industrial marketing Services: intangible products such as time, expertise, or some activity that you can purchase Firms that provide services are engaged in service marketing o Service marketing has become a major growth area in Canada (i.e. insurance companies, airlines, investment counsellors, etc) 4 Ps of marketing are: promotion, price, place, and product Relationship marketing: emphasizes lasting relationships with customers and suppliers o Stronger relationships (including stronger economic and social ties) can result in greater long term satisfaction and customer loyalty Marketing plans, decisions, and strategies are not determined unilaterally by any business, rather they are influenced by outside forces External environment: outside factors that influence marketing programs by posing opportunities or threats o Political/ legal: political activities, both foreign and domestic have profound effects on business Marketing managers try to maintain favourable political/ legal environment (i.e. by using advertising campaigns, lobbying, and contributing to political candidates to result in favourable laws)o Social/ cultural: changing social values (such as green environment movement, growing cultural diversity, etc) force companies to develop and promote new products for both individual consumers and industrial customers o Technological: new goods and services make existing products obsolete and many of them change our values and lifestyles o Economic environment: economic conditions determine spending patterns by consumers, businesses and government so it influences marketers plans for product offerings, pricing, and promotional strategies Markets are concerned with inflation, interest rates, recession, and recovery (they must monitor the general business cycle) Traditionally, analysis of economic conditions focused on the national economy and govts policies but it is becoming more prominent to look at the global economy o Competitive environment: marketers must convince buyers that they should purchase their products rather than those of some other seller Substitute products: a product that is dissimilar from those of competitors but that can fulfill the same need Brand competition: competitive marketing that appeals to consumer perceptions of similar products (i.e. Pepsi vs. Coca Cola) International competition: competitive marketing of domestic against foreign products (i.e. Air Canada vs. Swiss International Air Lines) Marketing managers: managers responsible for planning and implementing all the marketing-mix activities that result in the transfer of goods or services to its customers o These activities culminate in the marketing plana detailed and focused strategy for gearing marketing activities to meet consumer needs and wants Marketing begins when a company identifies a consumer need and develops a product to meet it Marketing mix (AKA four Ps): the combination of product, pricing, promotion, and distribution (place) strategies used in marketi
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