• Customers Needs, Wants, and Demands
o Wants – the form human needs take as shaped by culture and individual
o Demands – Human wants that are backed by buying power
• Market Offerings – Products, Services and Experiences
o Market Offerings – Some combinations of products, services, information, or
experiences offered to a market to satisfy a need or want
o Marketing myopia – The mistake of paying more attention to the specific
products a company offers than to the benefits and experiences produced by
• Exchanges and Relationships
o Exchange – The act of obtaining a desired object from someone by offering
something in return
o Market – The set of all actual and potential buyers of a product or service
These buyers share a particular need or want that can be satisfied
through exchange relationships.
• Designing a Customer Driven Marketing Strategy
o Marketing Management – The art and science of choosing target markets and
building profitable relationships with them
Aim to find, attract, keep, and grow target customers by creating,
delivering, and communicating superior customer value
• What customers will we serve (what’s our target market) ?
• How can we serve these customers best (what’s our value
o Five alternative concepts under which organizations design and carry out their
Production Concept: The idea that consumers will favour products that
are available and highly affordable and that the organization should
therefore focus on improving production and distribution efficiency Product Concept: The idea that consumers will favour products that offer
the most quality, performance, and features and that the organization
should therefore devote its energy to making continuous product
• Marketing myopia will occur if company only focuses on products
and not consumers. If they ‘build a better mousetrap, the world will
beat a path to their door’
Selling Concept: The idea that consumers will not buy enough of the
firms products unless it undertakes a large-scale selling and promotional
• Must be sure to also build profitable customer relationships rather
than only aggressive selling
• Takes an inside out perspective
Marketing Concept: The marketing management philosophy that
achieving organizational goals depends on knowing the needs and wants
of target markets and delivering the desired satisfactions better than
• Takes an outside in perspective
Societal Marketing Concept: Questions whether the pure marketing
concept overlooks possibleconflicts between consumer short-run wants
and consumer long –run welfare
• Society well being e.g. going green
o Marketing Mix Example
Product –Firm must create a need-satisfying market offering
Price – Decide how much it will charge for the offering
Place- How it will make the offering available to target consumers
Promotion – It must communicate with target customers about the offering
and persuade them of its merits
• Building Customer Relationships o Customer Relationship Management – The overall process of building and
maintaining profitable customer relationships by delivering superior customer
value and satisfaction.
Involves managing detailed information about individual customers and
carefully managing customer ‘touchpoints’
o Customer-Percieved Value – The customer’s evaluation of the difference
between all the benefits and all the costs of a market offering relative those
o Customer Satisfaction depends on the product’s perceived performance
relative to a buyer’s expectations.
If the product falls short of expectations the customer is dissatisfied.
• Customer Relationship Levels and Tools
o Frequency marketing programs reward customers who buy frequently or in large
o Club Marketing Programs Offer members special benefits and create member
opportunities (e.g. Harley Davidson sponsers the Harley Owners Group
• Relating with More Carefully Selected Customers
o Most marketers realize they want to target fewer, more profitable customers
This is called selective relationship management
o Customer-centricity strategy distinguishes between its best customers (called
angels) and less profitable ones (called demons)
• Relating more Deeply and Interactively
o Greater consumer control and now companies can practice marketing by
attraction (creating market offers and messages that involve consumers rather
than interrupt them, and no longer rely on marketing by intrusion.
Example: Companies have Facebook pages.
o Consumer-generated Marketing – marketing messages, ads, and other brand
exchanges created by consumers themselves –both invited and uninvited.
o Partner relationship management –working closely with partners in other
company departments and outside the company to jointly bring greater value to
customers. • Marketing Partners Outside The Firm
o Marketing channels consist of distributors, retailers, and others who connect the
company to its buyers
o Supply Chain describes a longer channel, stretching from raw materials to
components to final products that are carried to final buyers.
Supply chain management is companies strengthening their connections
with all partners along the supply chain.
• Success at building customer relationships also rests on how well
their entire supply chain performs against competitors’ supply
• Creating Customer Loyalty and Retention
o Customer Lifetime Value – The value of the entire stream of purchases that a
customer would make over a lifetime of patronage.
• Growing Share of Customer
o Share of Customer – The portion of the customer’s purchasing that a company
gets in its product categories.
• Airlines want to increase ‘share of travel’
• Car companies want to increase ‘share of garage’
To increase share of customer, firms can offer greater variety to current
customers (Amazon.com sells many products)
• Building Customer Equity
o Companies want not only to create profitable customers, but to ‘own them for life’
• What is Customer Equity?
o Customer Equity – the total combined customer lifetime values of all the
company’s current and potential customers.
o Sales and market share reflect the past, customer equity suggests the future
• Building the Right Relationships with the Right Customers o Company can classify customers according to their potential profitability and
manage its relationships with them accordingly
• Low potential profitability and little loyalty
• Little benefit between the company’s offering and their needs
• Potentially profitable but not loyal
• Good fit between the company’s offerings and their needs
• Butterflies because we can enjoy them but they will be gone after
• Profitable and loyal
• Strong fit between their needs and the company’s offerings.
• Firms want to make continuous relationship investments to delight
• Highly loyal but not very profitable
• Limited fit between their needs and the company’s offering
• Low profit potential.
• Most problematic customers, they should be fired
• The Changing Marketing Landscape
o There are major trends and forces that are changing the marketing landscape
and challenging marketing strategy, we look at four major developments:
The Digital Age
• Explosive growth in computer, cdigital technologies, internet etc.
Rapid Globalization • Marketers are now connected globally with their customers and
• All companies are touched by global competition now.
The Call for More Ethics and Social Responsibility
• Social values and responsibility with the earth (demanding
The Growth of Non-for-Profit Marketing
Chapter 1 Chapter 2
• Companywide Strategic Planning: Defining Marketer’s Role
o Strategic Planning – Process of developing and maintaining a strategic fit
between the organization’s goals and capabilities
Companies prepare annual plans, long-range plans, and strategic plans.
Involves adapting the firm to take advantage of opportunities in a
constantly changing environment.
• Defining a Market-Oriented Mission
o Mission Statement – a statement of the organization’s purpose, what it wants to
accomplish in the larger environment.
A clear mission statement acts as an invisible hand that guides people in
• Business Portfolio – The collection of businesses and products that make up the
o The best business portfolio is the one that best fits the company’s strengths and
weaknesses to opportunities in the environment.
• Analyzing the Current Business Portfolio
o Portfolio Analysis – Management evaluates the products and businesses that
make up the company
First step is to identify the key businesses that make up the company,
called Strategic Business Unit (SBU)
• This is a company division or product line within a division
o A company classifies all its SBUs according to the growth-share matrix – A
portfolio planning method that evaluates a company’s strategic business units in
terms of its market growth rate and relative market share. SBUs are classified as
stars, cash cows, question marks, or dogs
• High growth, high share businesses or products
• Often need heavy investemnts to finance their rapid growth • Eventually their growth will slow down and they will turn into cash
• Low growth, high share businesses or products
• Need less investment
• Low share-business units in high-growth markets
• They require a lot of cash to hold their share
• Management has to think hard about which questionmarks to build
and which to be phased out
• Low growth, low share businesses and products.
• Generate enough cash to maintain themselves but do not promise
to be large sources of cash.
o Company could invest just enough to hold the SBUu at current level, or they
could harvest the SBU milking its short-term cash flow, or they could divest the
SBU by phasing or selling it and using the resources elsewhere.
o A problem to the Matrix is it doesn’t provide evidence for future planning
• Developing Strategies for Growth and Downsizing
o Product/Market Expansion Grid
A portfolio-planning tool for identifying company growth opportunities
through market penetration, market development, product development,
or diversification (Figure 2.3)
• Market Penetration -Strategy for company growth by increasing
sales of current products to current market segments without
changing the product.
o Supports them by advertising, e.g. tim hortons must bring
the restaurant to the consumer. • Market Development - Strategy for company growth by
identifying and developing new market segments for current
o Tim Hortons can make new demographic target markets
such as ethnic groups or expand geographically.
• Product Development - Strategy for company growth by offering
modified or new products to current market segments
o Tim Hortons introduced bagels, cappuccino and
sandwiches to be more than just a doughnut shop.
• Diversification -Could start up or buy businesses outside of its
current products and markets
o Tim Horton’s could buy a gas station.
o It is important for companies to not only stratagies for growing their business
portfolios but also strategies for downsizing them
Downsizing –Reducing the business portfolio by eliminating products or
business units that are not profitable or no longer fit the company’s overall
• Partnering with Other Company Departments
o Each company department can be thought of as a link in the company’s value
o Value chain is the series of departments that carry out value-creating activities to
design, produce, market, deliver and support a firm’s products.
o Value Delivery Network – The network made up of the company, suppliers,
distributors, and customers who partner with each other to improve the
performance of the entire system
It is important for Toyota to build close relationships with suppliers to help
them produce lower-cost, higher quality cars which results in more
Competition takes place between entire value delivery networks instead
of individual competitors.
• Customer-Driven Market Strategy o Market Segmentation is dividing a market into distinct groups of buyers who
have different needs, characteristics, or behaviors and who might require
separate products or marketing programs
Can be grouped and served in various ways based on georgraphic,
demographic, psychographic and behavioural factors
o Market Segment is a group of consumers who respond In a similar way to a
given set of marketing efforts
In the car industry, the consumers who want the biggest most comfortable
car make up one market segment
o Market Targeting is the process of evaluating each market segment’s
attractiveness and selecting one or more segments to enter
• Market Differentiation and Positioning
o Marketers want to develop unique market positions for their products
o Positioning is arranging for a product to occupy a clear, distinctive, and
desirable place relative to competing products in the minds of target consumers.
> why a shopper would pay a little more for your brand
o Differentiation is actually differentiating the market offering to create superior
o 4 C’s
• Managing the Marketing Effort
o Four marketing management functions are analysis, planning, implementation
Plan gets translatied into marketing and other plans for each division,
product and brand.
Marketing Implementation is the process that turns marketing plans into
actions to accomplish strategic marketing objectives.
Control consists of measuring and evaluating the results of marketing
activities and taking corrective action where needed
Analyisis provides information and evaluations need for all the other
Marketer should conduct a SWOT Analysis – Overall evaluation of the
company’s strengths, weaknesses , opportunities, and threats
• Strengths include internal capabilities, resources and positive
situational factors that may help the company to serve its
customers and achieve its objectives.
• Weaknesses include internal limitation and negative situational
factors that may interfere with the companys performance
• Opportunities are favourable factors or trends in the external
environment that the company may be able to exploit to its
• Threats are unfavourable external factors or trends that may
present challenges to performance.
• Marketing Department Organization
o Chief Marketing Officer is the head in a companies entire marketing operation
and they are on equal puttings as CEO and CFO
o Most common form of marketing organization is the functional organization
Different activities are headed by a functional specialist – a sales
manager, advertising manager, marketing research manager, customer
service manager, or new-product manager.
Could also have geographic organization
Companies with very different products or brands create a product
For companies that sell one product line to many different types of
markets may use a market/customer management organization
• Marketing Control o Marketing Control – the process of measuring and evaluating the results of
marketing strategies and plans and taking corrective action to ensure that
objectives are achieved
Operating control involves checking ongoing performance against the
annual plan and taking corrective action when necessary.
Strategic control involves looking at whether the company’s basic
strategies are well matched to its opportunities.
o Return on Marketing Investment(ROI) is the net return from a marketing
investmenet divided by the costs of the marketing investment. It measures the
profits generated by investments in marketing activities.
Chapter 2 Chapter 3
• Marketing Environment – the actors and forces outside marketing that affect marketing
management’s ability to build and maintain successful relationships with target
o Marketing environment is made up of a microenvironment and a
• Microenvironment – the actors close to the company that affect its ability to serve its
customers – the company, suppliers, marketing intermediaries, customer markets,
competitor and publics.
• Macroenvironment – The larger societal forces that affect the environment –
demographic, economic, natural, technological, political and cultural forces
• Marketing Intermediaries – firms that help the company promote, sell and distribute its
goods to final buyers.
Resellers – distribution channel firms that help the company find
customers or make sales to them. (Walmart, Winners)
Physilcal Distribution Firms help the company to stock and move goods
from their points of origin to their destinations.
Marketing Services Agencies are the marketing research firms,
advertising agencies, media firms, and marketing consultant firms that
help the company target and promote its products to the right markets.
Financial Intermediaries include banks, credit companies, insurance
• Public – any group that has an actual or potential interest in or impact on an
o E.g. Financial, media, government, citizen-action, local, general and internal
• Changing Age Structure of the Population
o Baby Boomers – The 9.8 million Canadians born during the baby boom
following World War II and lasting until the mid-1960s
Canadian boom produced an average of 4 children, American boom 3.5
Most powerful force shaping the marketing environment o Generation X – The 7 million Canadians born between the 1967 and 1976 in the
‘birth dearth’ following the baby boom.
prize experience, not acquisition.
o Generation Y or Millenials – The 10.4 million children of the Canadian boomers,
born between 1977 and 2000.
Tweens (aged 8-12), teens (13-18), young adults (20-somethings)
Typical millennia is always using technology (tv, radio, cell phone,
internet, video games, often simultaneously) while Gen X spent a lot of
time infront of TV
• Generation Marketing
o Marketers need to be careful about turning off one generation each time they
craft a product or message that appeals effectively to another. Each generation
spans decades of times and many socioeconomic levels
• The Changing Canadian Household
o “crowded nest” syndrome is the increasing percentage of young Canadians aged
20-29 that now live with their parents.
• Geographic Shifts in Population
o Rapid increase in number of people who ‘telecommute’ (work at home/remote
Booming SOHO(small office/home office) market
o Canada population is becoming better educated
• Economic Environment consists of factors that affect consumer buying power and
spending patterns. Marketers must pay close attention to major trends and consumer
spending patterns both across and within their world markets.
o Countries have
Industrial economies which constitute rich markets for many different
kinds of goods Subsistence economies which consume most of their own agricultural
and industrial output and offer few market opportunities. (other extreme
from industrial economies)
Developing economies which can offer outstanding market opportunities
for the right kinds of products. (in the middle of these 2)
• Value Marketing is just the right combination of a product quality and good service at a
• Engel’s Laws – differences noted over a century ago by Ernst Engel in how people shift
their spending across food, housing, transportation, health care, and other goods and
services categories as family income rises.
o He found that as family income rises, the percentage spent on food declines, the
percentage spent on housing remains constant, and both the percentage spent
on most other categories and that devoted to savings increase.
• Natural Environment – Natural resources that are needed as inputs by marketers or
that are affected by marketing activities.
• Marketers should be aware of several trends in the natural environment
o First is the shortage of raw materials (especially oil, coal and various minerals)
o Second is increased pollution
o Third is increased government intervention in natural resources
• The Canadian government passed the Environmental Protection Act in 1989 establishing
pollution control measures as mean as their enforcement
• Technological Environment – Forces that create new technologies, creating new
product and market opportunities
o Perhaps the most dramatic force now shaping our destiny
o Every new technology replaces an older technology
• Political Environment – Laws, government agencies, and pressure groups that
influence and limit various organizations and individuals in a given society
• Governments develop public policy which is a set of laws and regulations that limit
business for the good of society as a whole
• Business legislation has been enacted for a number of reasons
o The first is to protect companies from each other o Second purpose of government regulation is to protect consumers from unfair
business practices (e.g. seller isn’t giving what they advertised)
o Third purpose is to protect the interests of society against unrestrained business
• Cause-Related Marketing is excercising their social responsibility and build more
positive images, many companies are now linking themselves to worthwhile causes
o Companies ‘do well by doing good’
• Cultural Environment – institutions and other forces that affect society’s basic values,
perceptions, preferences, and behaviours.
o Core beliefs and values are passed on from parents to children and are
reinforced by schools, churches, business and government.
o Secondary beliefs and values are more open to change
Believing in marriage is a core belief, believing in early marriage is a
• The Yankelovich Monitor identifies serveral consumer segements whose purchases are
motivated by self views.
o Do-it-yourselfers-Recent Movers :
Have a do it yourself attitude and view the experience as a form of self
Mostly Gen X’s
follow a single path or do the same thing twice.
View the experience as far more exciting than the entertainment value
View themselves as doing things that others wouldn’t dare to do
• More ‘cocooning’ which is people are going out less and staying home more to enjoy the
creature comforts of home and wealth
• There has been an overall decline in organizational loyalty
• Some people feel ruled by nature, some people feel In harmony with it, and still others
seek to master it. People have realized that nature is finite and fragile • Companies take a proactive stance toward the marketing environment and take
aggressive actions to affect the publics and forces int heir marketing environment rather
than simply watching and reacting.
o Whenever possible, smart marketing managers will take a proactive rather than
reactive approach to the marketing environment.
chapter 3 Chapter 4
• Sustainable Marketing – Marketing that meets the present needs of consumers and
businesses while also preserving or enhancing the ability of future generations to meet
o Considers both future needs of business, and future needs of consumers
o Calls for socially and environmentally responsible actions that meet both the
immediate and future needs of customers and the company.
• High Prices
o Critics charge that the marketing system cause prices to be higher than they
would under more ‘sensible’ systems because of:
High costs of distribution
• Supermarket chains are typically left with barely 1 percent profit
on their sales
High advertising and Promotion Costs
• Differentiated products –cosmetics, detergents, toiletries include
promotion and packaging costs that can amount to 40 percent or
more of the manufacturer’s price to the retailer.
• Companies mark up goods excessively, pills costing 5 cents may
• Deceptive Practices
o Marketers are sometimes accused of deveptive practices that lead consumers to
believe they will get more value than they actually do. It falls into three groups:
• Includes practices such as falsely advertising ‘factory/wholesale’
• Includes practices as misrepresenting the products features or
performance or luring the customers to the store for a bargain that
is out of stock Deceptive Packaging
• Includes exaggerating package contents through subtle design,
using misleading labeling or describing size in misleading terms.
o Competition Bureau acts as a watchdog to prevent such practices.
• High-Pressure Selling
o Salespeople are sometimes accused of high-pressure selling that persuades
people to buy goods they had no intention of buying
• Planned Obselence
o Products are claimed obsolete before they actually need replacement
• Poor Service to Disadvantaged Consumers
o Critics claim that the urban poor often have to shop in smaller stores that carry
inferior goods and charge higher prices
o Major chain retailers are ‘redlining ‘ drawing a red line aroud disadvantaged
neighbourhoods and avoiding placing stores there
• Too few Social Goods
o E.g. Peope sell cars (private goods) and it requires more highways, traffic control
and causes air pollution etc.
• Cultural Pollution
o Our senses are constantly being assaulted by marketing and advertising
• Marketing’s Impact on Other Businesses
o Companies expand by acquiring competitors rather than by developing their own
o Patents and heavy promotion spending keep or drive out competitors.
o Companies may set their prices below costs to discourage consumers from
buying competitors’ products.
• Consumer Actions to Promote Sustainable Marketing
• 2 Major Movements o Consumerism is an organized movement of citizens and government agencies
to improve the rights and powers of buyers in relations to sellers.
• First consumerism movement was fueled by rising prices in early
• Second was sparked by upturn in consumer prices during the
Great Depression and another drug scandal in 1960s
• Third was people being unhappy with rising prices as they were
better educated and products became more complex and
o Environmentalism is an organized movement of concerned citizens,
businesses, and government agencies to protect and improve people’s current
and future living environment.
Want to maximize life quality and for people and organizations to operate
with more care in the environment.
• Environment Sustainability is a management approach that involves developing
strategies that both sustain the environment and produce profits for the company.
o Crucial but difficult societal goal
• Figure 4.2 The environmental sustainability portfolio with Internal and External greeting
o Product stewardship example is thinking ahead preventing pollution from
production throughout the full product cycle
Design for environment / cradle to cradle practices – involve thinking
ahead to design products that are easier to recover, reuse, recycle
o Most companies focus on new-clean technology
• A company’s marketing should support the best long-run performance of the marketing
system and should be guided by five sustainable marketing principles:
o Customer-Oriented Marketing Company should view and organize its
marketing activities from the consumer’s point of view
o Customer-Value Marketing Company should put mosts o f its resources into
customer-value building marketing investments. o Innovative Marketing Company continuously seek real product and marketing
o Sense of mission Marketing means that the company should define its mission
in broad social terms rather than narrow product terms
Dove wants to sell more than beauty products, they are on a mission to
discover ‘real beauty’
o Societal Marketing Company makes marketing decisions by considering
consumers’ wants and interests, the companys requirements, and society’s long
• Figure 4.4 Societal Classifciation of Products
o Deficient Products have neither immediate appeal nor long-run benefits such as
o Pleasing Products have high immediate satisfaction but may hurt consumers in
long run such as ciggerettes and junk food
o Salutary Products have low immediate appeal but may benefit consumers in the
long run, bicycle helmets & insurance
o Desirable Products give immediate satisfaction and high long run benefits such
as tasty nutritious food
Chapter 4 Chapter 5
• Marketing Information and Customer Insights
o Information can be hard to obtain, information technologies have helped but now
we don’t need more information, we need better information
o Customer Insights are fresh understandings of customers and the marketplace
derived from marketing information that becomes the basis for creating customer
value and relationships
Customer insight teams are being created
o Costs are expensive, marketers should weigh the costs of getting more
information against the benefits resulting from it
• Internal Data electronic collections of consumer and market information obtained from
data sources within the company’s network
o Info can come from many sources including customer transactions,
demographics, psychographics, and buying behavior
o May not always be reliable as it could have been collected for other purposes
• Marketing Intelligence the systematic collection and analysis of publicly available
information about consumers, competitors, and developments in the marketing
o Techniques range from researching the internet to rooting through rivals trash
o Used to improve strategic decision making by understanding the consumer
environment, assessing and tracking competitors actions, and providing early
warnings of opportunities and threats.
• Marketing Research systematic design, collection, analysis, and reporting of data
relevant to a specific marketing situation facing an organization
o Used in a wide variety of situations
• Explatory Research Marketing research to gather preliminary information that will help
define problems and suggest hypotheses
• Descriptive Research Marketing research to better describe marketing problems,
situations, or markets, such as the market potential for a product or the demographics
and attitudes of consumers. • Casual Research is marketing research to test hypotheses about cause and effect
• Research plan should be presented in a written proposal
• Primary Data is information collected for the specific purpose at hand
• Secondary Data is information that already exists somewhere, having been collected for
another purpose (includes compants internal database)
o Less costly and easier to obtain
o Data may not be relevant, may not be up to date and may be impartial.
• Commercial Online Databases computerized collectio