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Chapter 2

COMM-1006EL Chapter Notes - Chapter 2: Variable Cost, Transaction Processing, Customer Retention

Commerce and Administration
Course Code
Laughren Tannys

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Marketig Maageet p. 9 
A marketer refers to the person or team who must decide which market opportunities to pursue, which
customers to target, what products and services to offer when and at what price, how to communicate
with prospects and customers, what distribution systems to use, and more…
These interrelated decisions, when brought together into an integrated whole, are called a
marketing program. Executing the marketing program is how the organization attracts, retains,
and grows its customers
A market refers to where buyers and sellers come together to do business
Some key jobs for a marketer are:
To help other managers in an organization understand what customers want and how this affect
managerial decisions
To make promises to customers about what the company has to offer and how that offer will
impact the customer
They really need to UNDERSTAND people and markets and by doing so to help everyone in an
organization create product and service offerings that entice people to become customers
A marketing plan is a document that specifies
a) What marketing program an organization intends to undertake
b) Why that program makes sense
c) What the program will require to be implemented
d) What results are expected
The ten steps for preparing a marketing plan are as follows:
The start-up marketer is looking for market opportunities, and is wondering how to get started into a
market, thus, has many decisions make for the first time
The ongoing marketer needs to consider what is working and what needs to be changed but of course
should be alert for new opportunities too
Best place to start is with a clear understanding of what performance you have achieved and
what performance you are trying to improve. This will help you decide what marketing tasks
should be focused on
Also helpful to know whether you should focus on improving the marketing strategy (direction
to go in and specifics of the program), better implementation of the strategy (doing it better), or
both strategy AND implementation
Whether for an ongoing marketer OR a start-up marketer, the question will arise as to what metrics of
success to use for marketing. The usual measures of performance are as follows:
1. Total sales - $ or unit volume
2. Sales per Customer - $ of units per customer, share of a customer’s total purchases in a category
over time, or a frequency of purchase
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3. Market Share expressed as a percentage of the company’s total sales relative to competitors
4. Sales Growth indicates the trend from one period to another
5. Total Profitability this may be expressed either as dollar gross/net profit or percentage of sales
6. Customer Profitability expressed as the average dollar profit per customer or by customer
7. Awareness expressed as the percentage of the target market that are aware of the firm or
specific things about it
8. Satisfaction may be measured by happiness with a product or service or willingness to refer to
a friend
9. Loyalty express what percentage of customers are repeat customers VS. new customers
is all about finding out what the marketer’s organization could do, and selecting which opportunities to
pursue (what the organization should do)
No matter the approach, it will involve 4 MAJOR activities:
1. Environmental Scanning
Environmental scanning refers to the close observation of trends in the market
This could include tracking political developments, economic issues, social trends, and technology
developments (PEST analysis)
An environmental scan is about what is happening or might happen external to your organizationIs it
an opportunity (something that will improve your business performance) or a threat (something that will
diminish it)?
As a marketer, you can add the most value to your organization picking up “weak signals” in the
environment, and helping your team do something about those signals before your competitor’s
It is important to reduce the PEST list to a manageable length, and develop a corresponding list
of implications (what does this mean for US?)
2. Competitive Analysis
Competitive analysis refers to a broad range of efforts to identify, understand, and anticipate those who
would intercept your potential customers or even take your existing customers away
It boils down to who else is offering something similar to what your business is offering, how
successful are they, and why?
Competitive analysis includes comparison of marketing programs and marketing performance
What changes are expected in the competitive environment that will affect your performance?
Understanding, anticipating, and dealing with competition is a core part of every marketer’s job,
and is essential at EVERY step of the marketing decision-making model
Competitive differentiation refers to seeking meaningful (to the customer) ways of being different than
competitors usually “different” means “superior” in some way
Are there any exploitable deficiencies in competitive products or services?
In their service, in their prices, in anything that matters to the customer?
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The most important part is that you look at everything from the CUSTOMER’S PERSPECTIVE and ask
yourself, why would a customer choose my offering over someone else’s?
3. Customer Analysis
Customer analysis refers to efforts to understand end-users, buyers, and intermediate buyers/sellers
Prospects are individuals, households, or organizations that a marketer things might be converted
into customers
Customers and Clients are those people who actually buy
Consumers is another term often used to describe members of a market, but more accurately,
these are the people who actually USE a product or service
Many marketers start their thinking by considering carefully individual potential customers/groups of
These customers may be in the consumer market (individuals, households, etc.) or the
business/institutional market (organizations)
Some of the usual questions that marketers pose about potential and current customers are:
What wants and needs are people trying to satisfy?
What is particularly important to them? (ex. convenience over price)
Are these needs and wants strong, or weak?
Can customers be influenced to want something different?
What motivations lie behind the choice of a product or service?
(ex. why do some people replace their cars long before they stop working)
Where do they get information about products, services, stores, and so on as they process
through the process of considering a purchase? Where do they shop and why?
When and how do they go through this shopping/purchasing process?
Market segmentation is a concept with great power for marketers. It is very helpful in the process of
target market selection and in making other marketing decisions
People differ, so we can’t assume everyone is equally a market opportunity; therefore, they are
divided into different group where each group is comprised of similar people that differ from one
4. Self-Analysis
Self-analysis: identifying and assessing market opportunities involves matching company capabilities
with what will win in the marketplace
An attractive opportunity may exist, but not all firms can win at pursuing it
Market opportunity assessment involves understanding your own strengths & weaknesses. The
combination of an analysis of strengths and weaknesses, opportunities, and threats, is often referred to as
SWOT analysis and is common in business strategy formulation
Strengths are those characteristics and capabilities that are superior to competition and can be
drawn on to exploit opportunities and deal with threats
Weaknesses are relative to specific opportunities and threats, not generalized statements
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find more resources at oneclass.com
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