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MGTA02H3 (361)
Chapter 5

management chapter 5.docx

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Chapter 5 What is Marketing? 4/6/2012 7:27:00 PM MARKTING  The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods ad services to create exchanges that satisfy individual and organization goals  Consumers are essential to marketing  Consumers need and wants are the forces that drive marketing  Marketing Concept o The whole firm is coordinated to achieve one goal – serve its present and potential costumers and to do at a profit o Firms must know what costumers want and closely follow the changes o COMMON GOAL- Costumer satisfaction  Study of marketing focuses on providing value and unity for consumers PROVIDING VALUE AND STATISTIFACTION  Consumers buy products that offer that best value when it comes to meeting their needs and wants  Value and benefits o Value: compares a product’s benefits with its cost o Benefits of high value product are much greater than its cost o Benefits Include function of product and emotional satisfactions associated with owning, experiencing or processing it o VALUE = BENEFITS/ COST o Marketing strategies focus on increasing value for customers  Value and utility o Utility: Ability of a product to satisfy a human wants or needs o 4 KINDS OF UTILITY  Time Utility: makes products available when consumers want them  Place Utility: Makes product available where customers can conveniently purchase them  Ownership Utility: Conveniently transferring ownership from store to customers  Form utility: making products available in the first place by turning raw materials into finished ornaments GOODS, SERVICES, AND IDEAS  Consumer goods: Products that the consumers buy for personal use o Firms that sell these are engaged in consumers marketing  Industrial goods: Products used by companies to produce other products o These firms engage in industrial marketing  Services: Intangible products, such as time, expertise or an activity that can be purchased o Engage in Service Marketing  Ideas: Marketers also promote ideas  Relationship marketing o It is a type of marketing that emphasizes lasting relationships with customers and suppliers o Strong relationships – including stronger economic and social ties; can result in greater long-term satisfaction and customer loyalty THE MARKETING ENVIRONMENT  Marketing decisions are strongly influenced by powerful outside forces  External Environment: Outside factors that influence marketing programs by posing opportunities or treats; 5 Environmental factors o Political and Legal Environment  Political activities, foreign and domestics has impact on business  To gain public support they use advertising campaign for public awareness on issues of local, regional, national importance o Social and cultural Environment  Changing social values forces companies to develop and promote new products for both individual consumers and industrial customers  Example, our value privacy, web surfers are discovering that a loss of privacy o Technological Environment  New technology creates new goods and services  New products makes some existing products obsolete (replace tap players with MP3s)  Many change our values and lifestyles o Economic Environment  Economic conditions determine spending pattern by consumers , business and government  They influence every marketing’s plans for products offerings, pricing, and promotional strategies  They must monitor the general business cycle which typically feature a pattern of transition from periods of prosperity to recession to recovery  Consumer spending increases “consumers conflicts” o Competitive Environment  Marketers must convince buyers that they should purchase their products rather than those of some other sellers  Each marketing program seeks to make its products the most attractive  3 types of completion  Substitute products: A Product that is dissimilar from those of competitors but that can fulfill the same needs  Brand Competition: Competitive marketing that appeals to consumers perception o similar products  International Competition: Competitive marketing of domestic against foreign products STRATEGY:THE MARKETING MIX  Business requires marketing management  Marketing Mangers: Mangers responsible for planning and implementing all the marketing-mix activities that results in the transfer of foods and services of customers Marketing Planning: A detailed strategy for gearing the marketing mix to meet consumer  Marketing mix: The combination of products, price, place and promotion strategies used in marketing products o 4 P’s in Marketing Mix o Product: A goods, service or idea that satisfies buyers’ needs and demands  Meeting consumers needs often means changing existing products to keep pace with the emerging market and competitors  Mass-customization: Allows marketers to provide products that satisfy very specific needs of consumers  Product Differentiation: The creation of a product or product image that differs fro existing products to attract consumers o Price: That part of marketing mix concerned with choosing the appropriate price for the product to meet the firm’s profit objective and buyers purchasing objective (sellers perspective)  Refers to the actual amount of money and total value of things that consumers are willing to give up in return for the benefits of the product or services  Price cant be so high that consumers turn to competitors product  Successful pricing means finding a profitable middle ground between these two requirements  Low and high prices can be effective  Low: generally leads to larger sales volumes  High prices usually limits market size but increase profits per unit , may attract customers by implying that the product is high quality o Place distribution: place refers to distribution  Distribution: That part of marketing mix concerned with getting products from the producers to the buyer, including physical transportation and choices of sale outlets  Firm must make decision about the channels through which they distribute products Promotion: Techniques for communicating information about products  Highly visible component of marketing mix  Important promotional tool: advertising, personal selling, sales prmotions, public relations Target Marketing and Market Segmentation 4/6/2012 7:27:00 PM Target market: Any group of people with similar wants and needs and may
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