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MGT252H5 (9)
Chapter 1

MGT252 - Chapter 1 Notes.doc

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Department
Management
Course
MGT252H5
Professor
Matthew Osborne
Semester
Fall

Description
Chapter 1 1.1 • • Marketing is • Managing profitable customer relationships. • Satisfying customer needs in a socially responsible and ethical manner. The activity, set of institutions, and process for creating, communicating, • delivering and exchanging offerings that have value for customers, clients partners, and society at large. • A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others. • Goal: 1. Attract new customers by promising superior values 2. Keep and grow current customers by delivering satisfaction Marketing process • • Creating value and customer relationships: 1. Understand the marketplace and customer needs and wants 2. Design a customer-driven marketing strategy 3. Construct a marketing program that delivers superior value 4. Build profitable relationships and create customer delight • Capturing value from customers: 1. Capture value from customers to create profits and customer equity • 1.2 • Need • States of felt deprivation, e.g. need food to survive. Physiological basis • • Wants • The form human needs take as shaped by culture, individual personality, society and marketing programs, e.g. need food but want burger. In terms of objects that will satisfy needs • • Demands • Wants that are backed by buying power • People demand products with benefits that add up to the most value and satisfaction • Marketing offerings • Some combinations of products, services, information, or experiences offered to a market to satisfy a need or want. • Not limited to physical products. • Marketing myopia • The mistake a seller makes by paying more attention to the specific products a company offers than to the benefits and experiences produced by these products. • Focus only on existing wants, not customer needs. • Exchange • The act of obtaining a desired object from someone by offering something in return. More than just buying g+s, e.g. church wants membership. • • Market • The set of all actual and potential buyers of g+s. 1.3 • • Marketing management • The art and science of choosing target markets and building profitable relationships with them. • Find, attract, keep, and grow target customers by creating, delivering, and communicating superior customer’s value. • Selecting customers to serve and the methods in serving them • Customer & demand management • Value proposition • The set of benefits or values it promises to deliver to consumers to satisfy their needs, so they’ll buy the products (instead of other companies’). • Marketing management orientations MarketingManagementOrientations Production concept • Consumers will prefer products that are available and highly affordable and that the org. should focus on improving production and distribution efficiency. • May lead to marketing myopia. Product concept • Consumers will favor products that offer the most quality, performance, and features and that the org. should devote its energy to making continuous product improvements. • Focus more on RnD to improve product • Doesn’t take into account customer’s preference. • E.g. Mousetrap vs. Rat poison Selling concept • Consumers will not buy enough of the firm’s products unless it undertakes a large- scale selling and promotion effort. • For unsought goods, e.g. insurance, giving blood. • To empty inventory, as inventory cost is high. • Aggressive selling • Creating sales transactions rather than building customer relationships. • Sell what the company makes than making what the market wants. • Assumes that customers who bought the products will like it. If they don’t like it, they will forget the disappointment and buy it again later. • Inside-out perspective Marketing concept Achieving org. goals depends on knowing the needs and wants of target markets • and delivering the desired satisfactions better than competitors do. • Not to find the right customers for your products, but to find the right products for your customers. Outside-in perspective • • Works well when a clear need exists and customers know what they want. • In many cases, customers don’t know what they want. Societal concept A company’s marketing decisions should consider consumers’ wants, the company’s • requirements, consumers’ L-R interests, and society’s L-R interests. • Questions consumer S-R
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