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Chapter 5

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Department
Management (MGT)
Course
MGTA02H3
Professor
Chris Bovaird
Semester
Summer

Description
Chapter 5 – Marketing (I) The Myth of “the better mousetrap” The 4 P’s The “Marketing Concept” The “World won’t buy Nothing”  That notion that you can invent something new, doesn’t mean it is better or people will want it  Just because you can make something, doesn’t mean people want to buy it.  As marketing managers, you figure out what people need, and figure out what people want.  Problem with mice in Boston in the 1940s. If a visionary entrepreneur could build a better mousetrap, First Question: How much are you willing to pay for it? Second Question: How much are you prepared to pay for it?  Third Question: What’s the best way from their point of view that i can excite them about it, and if they want to buy it they can make an informed decision?  The 4Ps of Marketing  In order to satisfy customers' needs, marketing managers must ensure they are producing goods or services that:  have features that consumers want. i.e. the right - PRODUCT  at a price they can afford or are prepared to pay - PRICE  the product/service is made known - PROMOTION  that it convenient to obtain – PLACE  The Marketing Concept  Well managed businesses don't sell what they have (product focus),  Well managed business sells what customers want (customer focus). Example: MacDonald's had long history of success and was identified with hamburgers. But MacDonald's started to lose sales (and profits) when consumers became more health conscious. Result - MacDonald's began to sell salads, other healthier foods. Sales and profits recovered  Right product, Right price, promote it, get it to the right place  Only finite amount of resources  Your job as a manager is to figure out “who might buy my product?” Markets and "Target" Markets  But, which customers....  Marketing manager's first job, determine whether there is:  a group, or groups who are willing and able to buy your product(s).  Such a group referred to as "a market"  With limited time, limited resources, no business can sell to everybody.  The whole world won't buy a business' firm's products.  Marketing managers begin by figuring out who will. Target market  The specific group for whom the business develops and maintains appropriate Products, at the right Price, to whom they Promote them, and at whose Place they are available. Market Segmentation  Marketers divide and cut the world up into smaller and smaller groups of similar people whose needs, wants, and attitudes to the product are likely to be similar.  This activity is called "segmentation" Demographic Segmentation  identifying people by their population characteristics:  age  gender  ethnicity  education  income Psychographic Segmentation  dividing people by what goes on in their hearts and minds:  personality  attitudes  motives  beliefs Geographic Segmentation  identifying people by where they live  region  urban vs. suburban  climate Nike is good at Segmentation. When Michael Jordan became spokesperson 15-20 years ago, he played for a urban big city team. Who do they want to buy running shoes? Start with Americans, Males, 14 – 24 year old Males, possibly black males. And you make the black urban toughness look good. Come up with slogans like “You do not win silver, you lose gold”. Because you are trying to sell products to kids who want to become winners. You get the demographics , psychographics, therefore they ended up selling a lot of running shoes to people who wanted to be JUST LIKE MIKE. Nike than went to Mia Hamm ( a
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