COMMERCE 1E03 Chapter Notes - Chapter 14: Social Media Marketing, Market Orientation, Customer Relationship Management
3 May 2018
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1E03-CHAPTER 14: Marketing: Helping Buyers Buy
LO1 – What is Marketing?
• Marketing – set of business practices designed to plan for and present an organization’s
products or services in ways that build effective customer relationships
o Simply, activities buyers and sellers perform to facilitate mutually satisfying
exchanges
• Market – group of people with unsatisfied wants and needs who have the resources and
willingness to buy
• “Find a need and fill it” concept is core to marketing
• In past, marketing focused on distribution from the seller to the buyer, but instead is
helping the buyer buy
o Ex. When people want to buy a car, they often go online first. They go on a
website and search for a car they want, so by the time they go to the dealer, they
may know exactly which car they want and best prices. The websites have helped
the buyer buy.
o Ex. Instead of travelling from school to school, parents and students can how use
podcasts, virtual tours, etc. to make less on-campus visits.
• Helping the buyer buy also helps the seller sell
o Ex. In vacation market, people find the trip they want themselves by going online.
In such industries, the role of marketers is to make sure the company’s
products/services are easily found online and that the company responds
effectively to potential customers.
The Evolution of Marketing
• Evolution of marketing includes 5
eras (orientations)
1. Production
2. Sales
3. Marketing concept
4. Market orientation
5. Social media marketing
1. The Production Era: Seller’s Market
• From the time the first European settlers arrived in Canada until the start of the 1900s
• General philosophy of business was, “Produce as much as you can because there is a
limitless market for it”
• Since limited production capability and vast demand for products, production philosophy
was logical and profitable because demand exceeded supply
• Business owners mostly farmers, carpenters, and trade workers
• Needed more and more, so goals centred on production
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• Focus on efficient production and wide-distribution as opposed to improving the product
2. The Sales Era: Shift to a Buyer’s Market
• 1920s, businesses developed mass production techniques (automobile assembly lines),
and production capacity often exceeded the immediate market demand
• Business philosophy turned from producing to selling
• Most companies emphasized selling and advertising in effort to persuade customers to
buy existing products, few offered extensive service after sale
• Excess capacity (supply > demand) due to the development of production lines
o “Sell what you make, not what you can sell”
3. The Marketing Concept Era
• After WW2 ended in 1945, returning soldiers started new careers and began families,
sparking tremendous demand for goods and services
• Postwar years had sudden increase in birth rate (baby boom), and also in consumer
spending
• Businesses recognized they needed to be responsive to customers is they wanted to get
their business up, competition for customer’s dollar was fierce
• Philosophy called the marketing concept emerged in 1950s
• Marketing concept had 3 parts
1. A customer orientation – finds out what consumers want and provide it for them.
▪ Ex. Casandra Rush, founder of Sassy Cassy’s Boots Inc. specialized in
boots and varying calf sizes so consumers have variety
2. A service orientation – make sure everyone in the organization has the same
objective: customer satisfaction.
3. A profit orientation – focus on those goods and services that will earn the most
profit and enable the organization to survive and expand to service more
customer’s wants and needs.
• Process went slowly during 1960s and 1970s, and during 1980s, businesses began to
apply the marketing concept more aggressively than in last 30 years
4. The Market Orientation Era
• Firms with market orientation focus on efforts on:
o continuously collecting information about customers’ needs and competitors’
capabilities
o sharing this information throughout the organization
o using the information create value, ensure customer satisfaction, and develop
customer relationships
• Customer-relationship management (CRM) – process of building long-term relationships
with customers by delivering customer value and satisfaction, or even exceed their
expectation with products over time
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• Retain customers over time or manage entire customer life cycle is a cost-effective way
for firms to grow in competitive markets; enhance customer satisfaction and stimulate
long-term customer loyalty
o Ex. Airlines which offer frequent-flyer programs to reward loyal customers with
free flights
• WHO are our most profitable customers? WHO SHOULD BE?
o E.g., 80/20 rule
▪ 80% of your business come from 20% of your customers
• WHAT opportunities exist for cross and up-selling?
• HOW can we maximize the lifetime value per customer?
• WHAT new products should we develop?
5. The Social Media Marketing Era
• Social media – term commonly given to websites and online tools that allow users to
interact with each other in some way, by sharing information, opinions, knowledge, and
interests
• 2 dimensions of the social media marketing era
o Social media marketing is about consumer-generated online marketing efforts to
promote brands and companies for which they are fans (or negatively promote
brands and companies for which they are non-fans)
o Social media marketing is used by marketers of online tools and platforms to
promote their brand or organizations.
▪ Most common tools/platforms used by consumers and organizations are
social networking sites (ex. Facebook, LinkedIn, and Twitter), blogs,
podcasts, etc.
• Social media creates a platform that empowers customers and provides them with an
opportunity to communicate with an organization and with other customers
o Erik Qualman says social media marketing is creating new form of economy
called socialnomics
▪ Consumers no longer search for products/services, but find them via social
media
▪ Suggests organizations must understand, navigate, and adapt to new
landscape
o Others believe organizations must be capable of taking advantage of social media
to increase sales, cut marketing costs, and communicate more directly with
customers
Non-Profit Organizations Prosper from Marketing
• Charites use marketing to raise funds to combat world hunger or obtain other resources
o Ex. Canadian Blood Services uses promotion to encourage people to donate blood
when local or national supplies run low
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find more resources at oneclass.com
Document Summary
In past, marketing focused on distribution from the seller to the buyer, but instead is helping the buyer buy: ex. When people want to buy a car, they often go online first. They go on a website and search for a car they want, so by the time they go to the dealer, they may know exactly which car they want and best prices. The websites have helped the buyer buy: ex. Instead of travelling from school to school, parents and students can how use podcasts, virtual tours, etc. to make less on-campus visits: helping the buyer buy also helps the seller sell, ex. In vacation market, people find the trip they want themselves by going online. In such industries, the role of marketers is to make sure the company"s products/services are easily found online and that the company responds effectively to potential customers.
