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Chapter 1

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Department
Management (MGM)
Course
MGMA01H3
Professor
Tarun Dewan
Semester
Summer

Description
What is marketing? The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives It is important that marketers recognize the other groups affected by marketing such as stakeholders and therefore marketing is also a social or managerial process Marketing Process 1) Understand the marketplace and customer needs and wants 2) Design a consumer driven marketing strategy 3) Construct a marketing program that delivers superior value 4) Build profitable relationships and satisfy customers 5) Capture value from customers to create profits and customer equity Understanding the marketplace Five core customer & marketplace concepts: 1) Needs, wants & demand - Needs: states of felt deprivation. Wants: form human needs take as shaped by culture and personality. Demand: human wants backed up by buying power 2) Market offerings – combination of products, services, information or experience offered to a market to satisfy a need/want. Marketing myopia is the mistake sellers make when the focus more on the specific products a company offers than the benefits the products offer. 3) Value and satisfaction – key to building relationships - Marketers must set the right level of expectation: low expectations may satisfy customers who actually buy but fail to attract more buyers. High expectations may results in disappointed buyers 4) Exchanges and relationships – beyond attracting new customers, marketers want to keep them loyal to their company. They want to build strong relationship by delivering superior customer value 5) Markets – set of actual and potential buyers Designing a consumer driven Marketing strategy Marketing Management - the art and science of choosing target markets and building profitable relationships with them. This is sometimes known as customer management and demand management. To design a winning strategy, 2 questions must be answered: 1) what consumers will we serve (whats our target market) 2) How do we serve them best (what’s our value proposition) Choosing our target market - Divides the market into segments of customers (marketing segmentation) and selects which segments it will go after (target marketing). - Company wants to select customers that it know it can serve well and profitably - To reduce excess demand companies may use demarketing to shift the demand. Power companies use this Choosing a value proposition - Must decide how it will differentiate and position itself in the marketplace - Value proposition is the set of benefits and value it promises to deliver to customer to satisfy their needs - EG: nokia is “connecting people” whereas apple is “touching is believing” - It answers the customers question of why they must choose brand 1 over brand 2 Marketing Management Orientations The five concepts under which organizations carry out their marketing strategies: 1) Production concept – idea that consumers like products that are available and highly affordable and therefore, the organization must focus on improving production and distribution efficiently. Risk of marketing myopia. 2) Product concept – idea that consumers favor products that offer the most quality, performance and features and therefore, the organization must focus on making continuous product improvements. Risk: marketing myopia 3) Selling concept – idea that consumers will not buy enough of a product unless it undertakes a large scale selling and promotion effort. It focuses on creating a sale transaction rather than building customer relationship 4) Marketing concept – achieving organizational goals depend on knowing the needs and wants of target markets and delivering their satisfactions better than competitors. It is customer centered with a “sense and response” strategy where they want to find the right product for the customer instead of vice versa. Putting the customer in the center. Customer driving marketing: understanding customer needs better than the customer themselves and creating goods that meet their existing needs and future needs that they are unaware of. Eg: iPhones, iPads, GPS 5) Societal marketing concept – idea that a company’s marketing decisions should consider consumer wants, the company’s requirements, consumers’ long run interest and society’s long run interests. Creating a Marketing Program Now the marketer develops a marketing program to build customer relationships by transforming the strategy to action. They do so by using the marketing mix aka the 4Ps. Building customer relationships Customer relationship management: overa
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