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Chapter 1

ADM2320 Chapter 1

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Marzena Cedzynski

ADM2330 Chapter One Overview of Marketing What is marketing? Marketing is a set of business practices designed to plan for and present an organization’s products or services in ways that build effective customers relationships.  Marketing is NOT o Just about buyers and sellers exchanging money for goods and services o About making a profit  The fundamental purpose of marketing is to create value for both the firm and customer. o Value is in essence what you get and what you give up. Core Aspects of Marketing Core one: Satisfying Customer Needs and Wants  Begins with understanding their needs and wants o Need: A person feeling physiologically deprived of basic necessities, such as food, clothing, shelter, and safety. o Want: the particular way, in which a person chooses to satisfy a need, which is shaped by a person’s knowledge, culture, and personality.  To understand customer needs and wants, the company must first identify the customers or market for its products or service. o Market: Refers to the groups of people who need or want a company’s products or services and have the ability and willingness to buy them. o Target market: The customer segment or group to whom the firm is interested in selling its products and services Core two: Marketing Entails Value Exchange  The exchange can occur between any two parties o Exchange: The trade of things of value between the buyer and the seller so that each is better off as a result.  Not simply a buyer and seller exchanging money for a good or service  Can be an exchange of information for convenience o EX: iTunes  Justin Bieber albums Core three: Marketing Requires Product, Price, Place, and Promotion Decisions Marketing Mix (four Ps): Product, price, and promotion – the controllable set of activities that a firm uses to respond to the wants of its target markets. Product: Creating Value  One main purpose of marketing is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs. o Goods: Items that can be physically touched o Services: Intangible customer benefits that are produced by people or machines and cannot be separated from the product. o Ideas: Include thoughts, opinions, philosophies, and intellectual concepts. Price: Transacting Value  Price: The overall sacrifice a consumer is willing to make – money, time, energy – to acquire a specific product or service. Place: Delivering Value • All activities necessary to get the product to the right customer when that customer wants it. • Supply chain management is the field that examines these activities. • Where would you find this product in the store? Promotion: Communicating Value  The communication activities of marketing  Used to inform, persuade and remind potential buyers  Used to influence their opinions or elicit a response Marketing Is Shaped By Forces And Players Within The Firm and Players External to the Firm  The consumer is the center of all marketing activities, and offering the best value possible will attract customers to products and keep them loyal.  For marketers to deliver the best value to their customers, they must leverage the full potential of their internal capabilities; work effectively with their partners; and constantly evaluate and respond to the competitive environment.  External forces such as cultural, demographic, social, technological, economic, and political and legal changes shape a company’s marketing activities. Core four: Marketing Can Be Performed By Both Individuals And Organizations  B2B (business-to-business): The process of selling merchandise or services from one business to another.  B2C (business-to-consumer): The process in which businesses sell to consumers.  C2C (consumer-to-consumer): The process in which consumers sell to other consumers.  Social media: The use of Internet tools to easily and quickly create and share content to foster dialogue, social relationships, and personal identities. Core five: Marketing Occurs in Many Settings  Both profit and non-profit entities  Developing economies  Entire industries Core Six: Marketing Helps Create Value Product Orientation Era:  Product-oriented companies focus on developing and distributing innovative products with litt
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