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Chapter 1 Notes midterm exam notes

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York University
Administrative Studies
ADMS 2200
Louise Ripley

Chapter 1 Notes  This chapter focuses on 1. Defining marketing, 2. Marketing process  Successful companies are focused on marketing – they share a passion for satisfying customer needs in respective target markets  Customer Relationships are very important in todays economy What is marketing?  Deals with customers  Marketing: is managing profitable customer relationships  The second goal is to attract new customers – by promising superior value and satisfaction  Sound marketing is critical to success of every organization  Marketing is all around us  Marketers want to become a part of ones life – To help one live the brand  Behind marketing is massive network of people and activities Marketing Defined  Marketing is more than just selling and advertising: it’s a way of satisfying customer needs  Selling and advertising are only part of a larger “marketing mix”  Tools are used to satisfy customer needs and build customer relationships  Marketing is a social and managerial process for organizations to obtain what they need and want from others  Marketing: Marketing involves building profitable, value earning customer relationships: to Build strong customer relationships in order to capture value from customers in return The Marketing Process  A five step model 1. Understand marketplace and customer needs 2. Design a customer driven market strategy 3. Create marketing program to deliver value 4. Build profitable relationships 5. Capture value from customer (to create profits and customer equity)  First four steps build value for customers; the final step captures value from customers. Understanding the Marketplace and customer needs 1. Needs, wants and demands  The most basic concept underlying marketing is human needs  Physical needs - food, clothing, warmth, safety  Social needs – belonging, affection  Individual needs – self expression  Wants are the form human needs, shaped by culture and individual personality  One NEEDS breakfast but WANTS and large coffee  When backed by buying power wants  demands  Marketers do this through research 2. Market offerings  Combination of products, sevices, information or experiences to satisfy needs or wants  Also include persons, places organizations, information and ideas.  Marketing Myopia: Where sellers focus on specific products, rather than benefits and experiences from these products  they lose sight of underlying customer needs because they are so amazed by their product. Only focus on current customer needs  Smart marketers focus on attributes such as Brand experiences. 3. Value and satisfaction  Lots of products  Customer has perceived satisfaction  Satisfied customers will buy again if they have good experience  Marketers must be careful in giving the right amount of expectation. If set too low it wont attract customers. If set too high  customer will be disappointed  This step is key to building and managing customer relationships 4. Exchanges and relationships  Exchange: the act of obtaining a desired object from someone by offering something in return  Companies want to grow, and marketers must maintain customer relations and built new ones 5. Markets  A market is a set of all actual and potential buyers of a product  Marketing means managing markets to bring about profitable customer relationships  Buyers carry on marketing as well. Consumers do marketing by purchasing the product  Marketing involves serving a market of final consumers vs competitors.  Research must be done in order to interact with consumers  Different groups add value to the system. Final consumers make a difference in whether or not the marketing is successful Designing a customer-driven marketing strategy  Marketing management (the art and science of building profitable relationships) must design a customer driven marketing strategy.  The marketing managers aim to attract grow and keep target customers by creating customer value Selecting customers to serve  The company must first segment customers – market segmentation: then “attack” the target market  Marketing cannot serve all customers, thus they want to serve the target market in the best way possible  Marketing management is 1. Customer management 2. Demand management Choosing a value proposition  How to target customers – how to differentiate and position itself in the market place are questions marketing management deals with  Value proposition: benefits or values it promises to delver  Value proposition differentiates one brand from another Marketing management orientations  Marketing management wants to design strategies to build profitable relationships to TARGET customers  Five concepts (alternative) of marketing strategies 6. Production concept – consumers will favor products that are available and highly affordable. 7. Product concept – customers will favor products that offer the most in quality, performance and innovative features. 8. Selling concept – customers will not buy enough of the firms products unless the company undertakes a large-scale selling and promotion effort. – Aggressive selling leads to high risks  Factory  existing products  selling and promoting  profits through sales volume 9. Marketing concept – achieving organizational goals depends on knowing the needs and wants of target market and delivering the desired satisfactions better than competitors do.  Leading to paths of sales and profits  Market  customer needs  integrated marketing  profits through customer satisfaction  Figure 1.3 for details between selling and marketing concept  Marketing concept takes an outside-in perspective  This method is often simple, responding to obvious customer needs and desires 10.Societal marketing concept - questions whether the pure marketing concept overlooks possible conflicts between consumers short run wants and consumer long run welfare.  This method improve both customer and society’s needs  Calls for sustainable marketing – socially and environmentally responsible marketing Preparing an integrated marketing plan and program  Marketing strategy outlines which customers the company will serve and how it will create value for these customers  The market develops an integrated marketing program to grasp value from target customers  Marketing program builds customer relationships and transforms marketing strategy into action.  The marketing mix is a set of tools to implement the marketing strategy  The major marketing mix is the Four P’s: product, price, place and promotion Building customer relationships  The first three steps in the marketing process 11.Understanding the marketplace 12.Designing customer driven market strategy 13.Constructing marketing prog
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