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MGTA02H3 (361)
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Chapter 5

MGTA04 Chapter 5.docx

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Management (MGT)
H Laurence

MGTA04 Chapter 5: Understanding Marketing: Market Segmentation and Market Research What is Marketing  Marketing: planning and executing the development, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy both buyers and seller’s objectives  We are influenced by marketing activities of companies that want us to buy their products  Our needs and wants are the driving forces of marketing  Marketing concept: the idea that the whole firm is coordinated towards serving present and potential customers at a profit firm must get to know what customers want and must understand changes in taste that occur  Marketing focuses on providing value and utility for customers  Value: relative comparison of a products benefits versus its costs: value=benefits/costs  Satisfied buyer perceives the benefits derived from a purchase to be greater than its costs  Benefits not only include features but also emotional satisfaction associated with owning, experiencing, and possessing it  Marketing strategies focus on increasing value for customers  Utility: Ability of a product to satisfy a human want or need  Marketing strives to provide four types of utility 1. Time utility: when products are available around the time they are needed 2. Place utility: making products available where customers can conveniently purchase them 3. Ownership utility: when a store sells a specific product it conveniently allows transferring ownership from store to customer 4. Form utility: when a company turns raw materials into finished products  allowing it to actually exist  Consumer goods: products purchased by individuals for their personal use, firms that sell products to customers for personal consumption are involved in consumer marketing  Industrial goods: products purchased by companies to use directly/indirectly to produce other products involves industrial marketing  Services: intangible products such as time, expertise, or an activity that can be purchased service marketing  Marketers also promote ideas i.e. television ads, etc  Marketing requires management as well and marketing managers are the ones responsible for planning and implementing all the marketing-mix activities that result in the transfer of goods or services to customers these activities culminate in the marketing plan  Marketing plan: a detailed strategy for gearing the marketing mix to meet consumer needs and wants  In planning and implementing strategies, marketing managers develop the four basic components of the marketing mix: 4 p’s i.e. product, place, price, and promotion 1  Product: a good, service or idea that satisfies buyers needs and demands  Mass customization allows marketers to provide products that satisfy very specific needs of customers  Product differentiation: the creation of a product or product image that differs enough from existing products to attract customers  Price: the part of marketing mix concerned with choosing the appropriate price for a product to meet the firms profit objectives and buyers purchasing objectives  Place aka distribution: the part of the marketing mix concerned with getting products from the producer to the buyer, including physical transportation and choice of sales outlets  Promotion: is the most highly visible component of the marketing mix and involves techniques for communicating information about products Target Marketing and Market Segmentation  Target markets: any group of people who have similar wants and needs and may be expected to show interest in the same products  Target marketing involves market segmentation: dividing a marker into categories according to traits customers have in common  Some businesses try to facilitate various market segments, others restrict themselves to one market segment  Positioning: process of fixing, adapting, and communicating the nature of the product in marketing  Market segments can be identified by researchers by looking at geographic, demographic, psychographics, and product-use variables  Geographic variables: geographical units that may be considered in a segmentation strategy  Demographic variables: characteristics of populations th
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