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BUS 343 (122)
Jason Ho (70)
Chapter 1

Marketing: Real People, Real Decision (3rd Edition): Chapter 1

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Department
Business Administration
Course
BUS 343
Professor
Jason Ho
Semester
Summer

Description
Chapter 1:What is Marketing? Welcome to a Branded World Welcome to Branded You Value the benefits a customer receives from buying and using a good or service in relation to the costs and sacrifices of buying and using it Marketing is a fundamental part of our lives both as consumers and as business people The Who and Where of Marketing Marketing principles are used to get people to endorse ideas or to change their behaviours in positive ways What is Marketing? Definition by American Marketing Association (AMA) o Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders Focus on Value Creation Marketing is all about creating and delivering value, and doing this for all parties involved in an exchange Another definition of marketing o Marketing is the process of achieving and organizational objectives by creating superior customer value for one or more target markets with a sustainable strategy Achieve objectives by creating offers that are perceived as being more valuable to customers than any other solutions (competing brands) Customer value what the customer gets in the purchase, use, and ownership of a product relative to the costs and sacrifices incurred To create a transaction or an economic exchange value, both parties need to believe that the exchange is fair The challenge to the marketer is to create, price, distribute, and communicate an attractive value proposition to the customer to get the most value in return Alternative definition focuses on the idea of creating value for specific target markets, groups of people that have different needs, wants, or preferences from other groups of people and would seek a different value proposition Develop sustainable strategy, a set of decisions that will allow us to compete effectively until our objectives have been achieved www.notesolution.com Marketing is About Creating Customer Value Important definition of marketing is that it is about creating value for diverse stakeholders Stakeholders people or organizations who influence or are influenced by marketing decisions Any person or organization that has a stake in the outcome of an economic exchange o Exchange the process by which some transfer of value occurs between a buyer and a seller Consumer the ultimate user of a good or service Consumers can be individuals or organizations; however it is not enough to just satisfy customers but to satisfy all parties Seller needs to make a profit to stay in business to be able to continue offering the goods and services valued by the customer Marketing Concept a business orientation that focuses on achieving organizational objectives by understanding customer needs, and creating and delivering values in exchange that satisfy the needs of all parties o Suggests that organizational objectives such as long-term profitability are best met by first understanding what customers need (value sought) and then determining the associated costs of satisfying those needs (creating and delivering that value) thus creating exchanges of mutual satisfaction o Central to the philosophy reflect in the marketing concept is an understanding that organizations exist to create value for consumers where it is neither efficient nor effective for consumers to attempt to satisfy their needs themselves Need the recognition of any difference between a consumers actual state and some ideal or desired state o Needs are related to physical conditions and the psychological conditions o Specific way a need is satisfied depends on an individuals history, learning experiences, and cultural environment Want the desire to satisfy needs in specific ways that are culturally and socially influenced o How each of them satisfies this need may be quite different Benefit the outcome sought by a customer that motivates buying behaviour (that satisfies a need or want) o Marketers must develop products that provide one or more benefits o Challenge is to identify what benefits people look for, develop a product that delivers those benefits, and then convince buyers that it does so better than a competitors product If succeed in creating a product that meets the needs of the customer, he or she will happily buy it without any persuasion from a sales person Salesperson may still be required to make the customer aware of the product and its relative merits in meeting the customers need Customers care most about benefits and typically less about the particular features or functions that deliver those benefits Demand customers desire for products coupled with the resources to obtain them o A market consist of all the consumers who have the same demand www.notesolution.com Marketplace any location or medium used to conduct an exchange Successful firms realize that the basic marketing concept applies to all aspects of the firms activities Trend toward integrating marketing with other business functions instead of setting it apart as a separate function Marketing is About Exchange Relationships Exchange relationship occurs when something is obtained for something else in return Almost anything of value can be exchanged For an exchange to occur, at least two people or organizations must be willing to make a trade and each must have something the other wants All exchanges involve marketing decisions to create the value being exchanged, communicate the value proposition and facilitate the exchange relationship Marketing as a Decision-Making Process Marketing decision making involves a series of steps that entail both careful though (planning) and action (executing) Marketing is a strategic decision-making process in which marketing managers determine the most appropriate set of decisions for a particular organization at a particular time will help the organization meet its long-
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