AFM 131 - Chapter 14 Notes.docx

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Accounting & Financial Management
AFM 131
Robert Sproule

Chapter 14 Notes 1 Marketing: Building Customer and Stakeholder Relationships What is Marketing?:  Marketing is the process of determining customer needs and wants and then developing goods and services that meet or exceed these expectations.  Green marketing is the marketing efforts to produce, promote, and reclaim environmentally-sensitive products. Evolution of Marketing  The evolution of marketing involves: 1.) production, 2.) sales, 3.) marketing concept, and 4.) customer relationship. 1.) Production: since the early European settlers arrived in Canada until the start of the 1900s, the general philosophy of business was to produce as much as possible because there were limited production capabilities and great demand. Manufacturers focused on production, as most goods were bought as soon as they became available. The greatest marketing need was for distribution and storage. 2.) Sales: by the 1920s, businesses had developed mass production techniques (car assembly lines) and production capacity often exceeded market demand. Thus, the business philosophy switched to an emphasis on production to an emphasis on sales, especially in an effort to sell existing products. 3.) Marketing: after the end of WWII in 1945, there was great demand for goods and services for returning soldiers. Since there was also the baby boom, competition wasfierce for the consumer’s money. To be responsive to consumers, businesses started marketing. Customer orientation dealt with figuring out what customers want and provide it to them. Service orientation is ensuring that everyone in the organization has the same objective: customer satisfaction. Profit orientation is the focus on the goods and services that will earn the most profit and enable the organization to survive and expand to serve more consumer wants and needs.  Customer relationship management (CRM) is the process of learning as much as possible about customers and doing everything you can to satisfy them, or even exceed their expectations, with goods and services over time. The idea is to enhance customer satisfaction and stimulate long-term customer loyalty (ex. Airlines offer frequent-flier programs that in the long-run increase customer loyalty by providing free flights).  Non-profit organizations use marketing to get people to know about their services and to help (ex. Canadian Blood Services needed 80000 new blood donors so they used marketing to find these people to donate blood). Marketing Mix: Chapter 14 Notes 2  The marketing mix are the ingredients that go into a marketing program: 1.) Product; 2.) Price; 3.) Place (where people will buy it) and; 4.) Promotion.  A product is any physical good, service, or idea that satisfies a want or need.  Test marketing is the process of testing products among potential users.  The service continuum shows the balance between service-dominated offerings (intangible services such as teaching and nursing) compared to good-dominated offerings (tangible goods such as neckties and dog food).  A brand name is a word, device (design, shape, sound, or colour), or combination of these used to distinguish a seller’s goods or services from those of competitor’s.  Price is the money or other consideration (including other goods and services) exchanged for the ownership or use of a good or service.  Place involves the thinking of where you want to sell (ex. Personally deliver or sell in a specialty store).  Promotion is all the techniques sellers use to motivate customers to buy their products (ex. Advertising, personal selling, public relations, and coupons). Promotion deals with the aspect of relationship-building with customers. Providing Marketers with Information:  Marketing research is the analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions. It helps determine what customers have bought in the past and what changes have occurred to affect future purchases. The Marketing Research Process  Four key steps are involved in marketing research: 1.) Defining the question and determining the present situation, 2.) Collecting data, 3.) Analyzing the research data and, 4.) Choosing the best solution and implementing it. Defining the Question and Determining the Present Situation: Marketing researchers should be given the freedom to help discover what the present situation is, what the problems or opportunities are, what the alternatives are, what info is needed, and how to go about gathering and analyzing the data. Collecting Data: Second
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