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Chapter 10

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Department
Commerce
Course
COMM 103
Professor
Gary Bisonnette
Semester
Fall

Description
Chapter 10: The Marketing Challenge Marketing’s Purpose - Encompasses assessing market dynamics, identifying needs and solutions and determining what price to charge - Ensuring that customers have access to products - Create awareness and preference for the products and/or services offered - The purpose of marketing is to design, develop and communicate value - Principle # 1: Customers don’t buy products or services… they buy solutions to problems or needs - Principle # 2: Customers will not pay more for a product if they can get a similar product for less Marketing – Its Link to Strategy - Marketing is fundamentally responsible for connecting customers to the products and services offered by an organization. And reinforcing the needs and desires which are being satisfied - Six R’s of marketing o The right need to purse o The right solution to offer o The right value proposition to position the organizations products and services around o The right methodology for delivery o The right price to charge o The right communication message - To be successful; in the execution of its overall strategy, an organization must be successful at both the product strategy level and the business strategy level - Position is all about developing a unique, credible, sustainable and valued place in the minds of our customers - Market position is built around product and/or services Segmentation and Target Marketing - Successful companies recognize that they cannot be all things to all people - Attempting to provide a standardized product to the entire marketplace often results in failing to meet the needs and expectations of customers seeking a specific value or benefit - Successful marketers focus on trying to identify particular segments within the market and then delivering products/services specifically aligned with meeting the needs of customers within these segments Marketing Research - Concept of market segmentation recognizes that “one size does not fit all” - Primary sources of information o Sources an organization develops to utilize to generate information specific to the products and services offered  Eg. Customer surveys, input via social media sits and focus groups o Focus groups may provide a better understanding of the value of products o Social media networks enable marketers to get a much earlier and stronger sense of trends occurring in the marketplace - Secondary sources of information o Sources of information focusing on conducting research of and drawing conclusions from information which already exists and is available at no cost or on a fee basis  Eg. Researching the Statistics Canada website  Reviewing various media options to better understand current and forward-occurring social and cultural trends  Information searches via Google or Bing  Company websites, annual reports or third party commentary - Segmentation o Demographics – age, gender, income etc. o Geographic Clustering – location, reach etc. o Psychographics – lifestyle, status, ego, emotion, tastes, trends etc. o Behavioral – use, buying patterns etc. - Utilizing marketing research to assist in better understanding the marketplace and how it is segmented enables marketers and managers to determine which segments are the most attractive recipients to the marketing message which the organization intends to convey Target Marketing - Leveraging the information acquired during the research and segmentation process and determining which market segment(s) the organization feels are its primary or best opportunity for penetration and sales success - Recognizes that although a large portion of the market may be aware; the ability, desire or willingness to purchase it may lie with a much smaller percentage - Segmentation determines the level of “need” with respect to a problem and the viewing of a product or service as a solution to need - Target marketing then looks at the segments exhibiting the greatest need and identifies segments with the greatest willingness to purchase - Segmentation defines the level of need and target marketing defines those who will pay for the need Marketing Challenge - Need identification focuses on assessing opportunities which exist within the marketplace for current and potential products/services - Identify untapped or unmet needs within the marketplace and leveraging our R&D capabilities to develop products/services which will meet such needs - Takes into consideration whether our emphasis should be on new customer acquisition, further leveraging relationships with existing customers or a combination of the two Where do Opportunities Exist? - Assist in analyzing the various potential options for further revenue and profitability growth - Market Penetration Opportunities o Focuses attention on growing the sales revenue of the organization’s existing products through its existing customer bas o Gets existing customers to purchase the organization’s products/services more frequently o Increase the average transaction revenue per purchase o Try to increase one’s market share from an existing market - New Product/Service Opportunities o Focuses on identifying and developing new products/services for the existing markets within which it competes/ existing customer base which it serves o Critical part of strategy is to invest into R&D for the purpose of creating new products/services for their existing and potential customer base - Market Develo
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