Overview of marketing.docx

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Business Administration
Business Administration 3301K
Scott Mac Dougall- Shackleton

Overview of marketing 10/4/2011 8:52:00 PM Marketing:  An organizational function and a set of processes for creating, communicating and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stakeholders Exchange:  The idea that people give up something to receive something they would rather have 5 conditions must be met for an exchange to take place:  the are at least two parties  each party has something that might be of value to the other party  each party is capable of communication and delivery  each party is free to accept or reject the xchange offer  each party believes it is appropriate or desirable to deal with the other party 4 Marketing Management Philosophies: Production orientation:  What can we make or do best o Focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace o Biggest downfall is not considering whether the goods and services the firm produces can most efficiently meet the needs of the marketplace Sales orientation:  How can we sell more aggressively o The idea that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits o Downfall, lack of understanding the needs and wants of the marketplace Market Orientation:  What do customers want and need o Assumes that a sale does not depend on aggressive sales force effort but rather on a customer’s decision to purchase a product. A market orientation is synonymous with the marketing concept o Marketing concept  The idea that the social and economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting organizational objectives Societal marketing orientation:  What do customers want and need, and how can we benefit society o Idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals’ and society’s long- term best interests Differences between sales and market orientations -the two orientations can be compared using 5 characteristics:  organization’s focus  the firm’s business  those to whom the product is directed  the firm’s primary goal  the tools used to achieve those goals Organizational focus:  Customer value: o The relationship between benefits and the sacrifice necessary to obtain those benefits  Customer satisfaction: o Customers’ evaluation of a good or service based on whether it has met their needs and expectations  Relationship marketing: o A strategy that entails forging long-term partnerships with customers  Empowerment: o Delegation of authority to solve customers’ problems quickly- usually by the first person the customer notifies regarding the problem Strategic Planning 10/4/2011 8:52:00 PM Strategic Planning:  The managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities  Long-turn profitability and growth What is a marketing plan? Planning:  The process of anticipating future events and determining the strategies to achieve organizational objectives Marketing planning:  Designing activities relating to marketing objectives and the changing marketing environment Marketing plan:  A written document that acts as a guidebook of marketing activities for the marketing manager  Elements of a marketing plan: o Business mission statement o SWOT o Objectives o Marketing strategy  Target market strategy  Marketing mix (4Ps) o Implementation evaluation control Mission statement:  A statement of the firm’s business based on a careful analysis of benefits sought by present and potential customers and analysis of existing and anticipated environmental conditions Marketing myopia:  Defining a business in terms of goods and services rather than in terms of the benefits that customers seek Strategic business unit (SBU):  A subgroup of a single business or collection of related businesses within the larger organization Environmental scanning:  Collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan Marketing objective:  A statement of what is to be accomplished through marketing activities Competitive advantage:  The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition Cost competitive advantage:  Being the low-cost competitor in an industry while maintaining satisfactory profit margins Experience curves:  Curves that show costs declining at a predictable rate as experience with product increases Product/service differentiation competitive advantage:  The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competition  Ie Nike, introducing shox Niche competitive advantage:  The advantage achieved with a firm seeks to target and effectively serve a small segment of the market Sustainable competitive advantage:  An advantage that cannot be readily copied by the competition  Ie, Rolex Strategic Directions Market penetration:  A marketing strategy that tries to increase market share among existing customers o McDonalds’ cells more happy meals with Disney movie promotions Market development:  A marketing strategy that entails attracting new customers to existing products o McDonald’s opens restaurants in China Product development:  A marketing strategy that entails the creation of new products for existing customers o McDonald’s introduces premium salads and McWater Diversification:  A strategy of increasing sales by introducing new products into new markets o McDonald’s introduces line of children’s clothing Portfolio matrix:  A tool for allocating resources among products of strategic business units on the basis of relative market share and market growth rate Star:  A business unit that is a fast-growing market leader  Ie, tablets o Cash cow:  A business unit that generates more cash than it needs to maintain its market share  Low growth, but has a dominant market share, ie personal computers and labtops o Problem child (question mark):  Unit that shows rapid growth but poor profit margins  Integrated phone/palm device o Dog:  Has low growth potential and a small market share  Mainframe computer Describing the target market Marketing strategy:  The activities of selecting and describing one or more target markets and developing and maintaining a market
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