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Module #1 Notes.doc

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Ryerson University
MKT 100
Tina West

Module 1 Notes 1. What is marketing? better innovation and the diffusion of new products and services that better use human labour and scarce resources o delivering value to customers and shareholders through the relentless improvement of product development, distribution, selling, advertising and customer service processes o being driven to do better, thinking quickly, doing things quickly, out-thinking and out- hustling your competition o creating and managing constant profitable change in a firms trading processes o Selling change inside the organization and selling change to customers Quality and price variance across products and services exists in competitive markets a few products and services in every market are best buys. Most are not. Products and services = inferior, if you do not have excellence in your distribution and customer relationship processes the firm should fix them. Fix them first and as fast as possible and do not focus on any other process improvement. not about developing excellence in creating advertising and promotions that claim the superiority of unproven or non-existent quality and performance o marketing is not just about advertising; It is about the trading of new inventions about new inventions in trading that increase product quality, reduce price and increase customer satisfaction, which in turn increases profit competitive focus needs to be on winning the product and service innovation race and the distribution innovation race Winning is important if you care about the future lifestyles of your children and grand- children o US will remain the dominant world market and economy for another 20-30 years o The U.S. economy is bigger than the next three economies combined, but growth in the U.S. economy is far less than growth in the world economy o US is not in action Asia is in action where there are three billion consumers living in economies that are growing more prosperous at a rate that was at 6-12% a year over the last decade o If they lose their world leadership in product and service innovation and the profitable distribution of such innovation North America = lower standards of living o North America maintains its leadership in marketing, in product and service innovation and the profitable distribution of such innovation, then its citizens will prosper and it has a very bright future. o The next several decades will be crucial. The futures of Canada and the United States depend greatly on their business executives being more skilled at marketing than their foreign rivals are, and that means becoming more skilled at marketing than they have ever been in the past. If this challenge excites you, energizes you, and makes you want to study hard, then you are part of the solution. Module 1 Notes 2. The History of Trading and Wealth Creation Professor Jared Diamond concludes that societies that prospered and came to dominate were lucky to start in environments with the right materials and climates to invent and use tools, and to develop agriculture and herding. The result was the development of trade and labour specialization within their culture and then between neighbouring cultures. History = dominant societies conquering less developed cultures, by bringing their agriculture, their technology and their trading to new colonies, and then the new colonies trade back home. o hunter-gatherers were replaced by farmers and herders o farmers and herders were replaced by societies with more advanced food production technologies and industrial technologies directed at trading o more aggressive and innovative traders and trading systems, with their superior military technology, took over and dominated old trading systems and networks For example, the Spanish Trading Empire replaced the Aztec Trading Empire. But it was in turn replaced by the British Trading Empire, which was in turn first challenged by the French and Germans and then ultimately replaced by the American Trading Empire, which is now being challenged by China and a bunch of other countries. Today it is up to society to trade for survival, success, prosperity, and power. Compare South Korea with North Korea - the bullies, the raiders, the killers ruled and still do in some nations. o the power elites are often very conservative - conserving their own power and wealth o resisting new innovations that threaten their control and resisting the opening up of their economies and protected markets to new ideas, new skills and foreign trade o those in power have often stood in the way of progress and prohibited the access of the masses to better and cheaper products and services But according to Professor Diamonds analysis o A countrys ability to trade decreased because of validity and loss of culture o lessons for todays political leaders are obvious: respect, promote, improve, and advance your traders and their trading and marketing skills o Make marketing (innovation in products, services and the diffusion of innovation) the centre piece of your culture o triumph of marketing - how time and technology is invented, diffused and constantly improved floats all boats inventions that change the world and benefit everyone - invention and diffusion of money, credit, insurance, railways, steamships, refrigeration, penicillin, the airplane, weather forecasting, radio, telephones, cell phones, television and the Internet Demonstrate the great humanizing; welfare-creating and civilizing benefits of the world trade in inventions. Between 1935 and 1955, the infant death rate around the world decreased by 90% as a result of the worldwide diffusion of antibiotics o The efficient diffusion system that developed was a new worldwide market so that everyone everywhere could have access to the new drugs, if necessary through aid organizations or Governments, but mostly in open local markets. They are Schumpeterian growth and Smithian growth - two drivers of wealth and welfare creation. o Schumpeterian economic growth comes from the intrinsic extra value/utility that technological invention adds in useModule 1 Notes o The 1980s computer chip over the 1950s rows of valves. The iPod over the Walkman o Joseph Schumpeter economist who theorized about the creative destruction effects of innovation: the marketing of creative new innovations destroys the markets for old innovation o Smithian growth and prosperity effect comes from the added-value, created not by the invention in use, but by the exchange of inventions first identified by Adam Smith o The core principle behind Smithian growth is the added-value of exchange, illustrated as follows: Two individuals, X and Y meet. X owns 10 Units of A, Y owns 10 units of B. They discuss whether they would like to barter two units of A for two units of B. X agrees because he values two of B much more than two of his 10 units of A because he still has 8 other units of A. Y agrees because he values two units of A much more than two of his 10 units of B. They make the exchange, and both X and Y now own possessions that are more valuable than before the exchange. Value, wealth, and welfare have been increased.
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