MOS2320 First Half Notes.docx

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Department
Management and Organizational Studies
Course
Management and Organizational Studies 2320A/B
Professor
All Professors
Semester
Spring

Description
Ch 1 Textbook NotesSeptember1911400 PM1Marketing is managing profitable customer relationships The aim of marketing is to create value for customers and to capture value from customers in return2For decades Tides marketers have positioned the brand on superior functional performance with hardhitting ads showing before and after cleaning comparisonsWhat is Marketing3Marketing is managing profitable customer relationships4Peter Drucker the aim of marketing is to make selling unnecessary5Marketing is the activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients partners and society at largeoFocus of marketing is on customers and profitabilityThe Marketing Process6In the first four steps companies work to understand consumers create customer value and build strong customer relationships In the final step companies reap the rewards of creating superior customer valueUnderstanding The Marketplace and Customer Needs1Needs wants and demands1Market offerings products services and experiences1Value and satisfaction1Exchanges and relationships1MarketsHuman needs are states of felt deprivationsoInclude basic physical needs of food clothing warmth etcWants are the form human needs take as they are shaped by culture and individual personalityoShaped by society and marketing programsDemands are human wants backed by buying poweroDemand products with benefits that add up to the most value and satisfactionMarket Offerings some combination of products services information or experiences offered to a market to satisfy a need or wantoNot limited to physical products but also include servicesoInclude other entities such as people places organizations information and ideasMarketing Myopia The mistake of paying more attention to specific products a company offers than to the benefits and experiences produced by these productsBy orchestrating several services and products they create brand experiences for consumersCustomers form expectations about the value and satisfaction that various market offerings will deliver and buy accordinglyExchange the act of obtaining a desired object from someone by offering something in returnoMarketing consists of actions taken to build and maintain desirable exchange relationships with target audiences involving a product service idea or other objectMarket the set of all actual and potential buyers of a product or serviceoMarketing means managing markets to bring about profitable customer relationshipsoMarketing involves serving a market of final consumers in the face of competitionDesigning a CustomerDriven Marketing StrategyMarketing Management the art and science of choosing target markets and building profitable relationships with themoAim is to find attract keep and grow target customers by creating delivering and communicating superior customer valueTo design a winning marketing strategy the marketing manager must answer two important questions what customers will we serve whats our target market And How can we serve these customers best whats our value propositionThe company must decide who it will serve It does this by dividing the market into segments of customers market segmentation and selecting which segments it will go after target marketingCompanies may practice demarketing to reduce the number of customers or to shift their demand temporarily or permanentlyMarketing management is customer management and demand managementA companys value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needsMarketing Management OrientationsThere are five alternative concepts under which organizations design and carry out their marketing strategies the production product selling marketing and societal marketing conceptsThe Production ConceptProduction Concept the idea that consumers will favour products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiencyoCompanies running this philosophy run a major risk of focusing too narrowly on their own operations and losing sight of the real objectivesatisfying customer needs and building customer relationshipsThe Product ConceptProduct Conceptthe idea that consumers will favour products that offer the most quality performance and features and that the organization should therefore devote its energy to making continuous product improvementsoCan lead to marketing myopia if you only focus on your productsThe Selling ConceptSelling Concept the idea that consumers will not buy enough of the firms products unless it undertakes a largescale selling and promotion effortoTypically practices with unsought goodsthose that buyers do not normally think of buying like insuranceoCarries high risk focuses on creating sales transactions rather than building longterm profitable customer relationshipsThe Marketing ConceptMarketing Concept The marketing management philosophy that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors dooCustomer focus and value are the paths to sales and profitsoCustomercentred Sense and respond philosophyoTakes an outsidein perspectiveStarts with a welldefined market focuses on customer needs and integrates all the marketing activities that affect customersSocietal Marketing ConceptSocietal Marketing Concept the idea that a companys marketing decisions should consider consumers wants the companys requirements consumers longrun interests and societys longrun interestsoBalances three interests consumers wants satisfaction company profits and society human welfarePreparing an Integrated Marketing Plan and ProgramThe marketing program builds customer relationships by transforming the marketing strategy into action It consists of the firms marketing mix the set of marketing tools the firm uses to implement its marketing strategyMarketing mix are classified into four broad categories the four PsoProduct Price Place and PromotionBuilding Customer RelationshipsCustomer Relationship Management is perhaps the most important concept of modern marketingoIt involves managing detailed information about individual customers and carefully managing customer touchpoints to maximize customer loyaltyCustomer Relationship Management the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfactionoDeals with aspects of acquiring keeping and growing customersCustomer Perceived Value the customers evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offersoCustomers act on perceived value not accurately or objectivelyCustomer Satisfaction the extent to which a products perceived performance matches a buyers expecationsoMost studies show that higher levels of customer satisfaction lead to greater customer loyalty which in turn results in better company performanceIrobot Roomba robot vacuum the company turned the idea of a smart vacuum into a pet selling merchandise to customize their individual products and some owners even name their vacuumsA company can always increase customer satisfaction by lowering its price or increasing its servicesOther companies sponsor club marketing programs that offer members special benefits that create member communitiesoHarleyDavidson Owners Group HOGMost marketers realize that they dont want relationships with every customer Instead they now are targeting fewer more profitable customers oCalled selective relationship management many companies now use customer profitability analysis to weed out losing customers and to target winning ones for pamperingoBest Buy recently rolled out a new customercentricity strategy that distinguishes between its best customers called angels and less profitable ones called demons oCustomer analysis revealed that its best customers fell into five groupsBarrys highincome menJills suburban momsBuzzes male technology enthusiastsRays Young family men on a budgetSmall business owners
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