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Chapter 1

chapter 1

5 Pages
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Department
Management (MGM)
Course Code
MGMA01H3
Professor
Ingrid L.Stefanovic

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Tuesday, September-15-09 Principles of Marketing Chapter 1
INTRODUCTION
Marketers are increasingly forming a sort of relationship with their customers based on
information gleaned from extensive databases
oExample: retailers track your shopping history
Marketing is more than just advertising and selling
Marketing is all about matching producer’s output to customer’s activities
Idea of matching producer’s output to customers’ activities sounds less complicated than
it really is
oThere are many product and company failures
The cause of poor marketing is usually a lack of focus on customers
Marketing is the business function that interprets customer needs to the rest of the
organization and brings the resulting offerings of the firm to the customer
Consumer perceptions, attitudes, time constraints, space, lack of information and location
are all things that contribute to the gap between producers and consumers
oThere is a bridge that marketing must build to close the gap, and it is built through
the eight marketing functions
Buying
Selling
Transporting
Storing
Grading
Financing
Risk taking
Information collecting
Disseminating
oA reduction in the gap implies an increase in the utility consumers associate with
a product or service
The result is that consumers are more likely to enter into an exchange
relationship with the marketing organization
MARKETING IS ABOUT EXCHANGE
Exchange process is when two or more parties give something of value to one another to
satisfy felt needs.
oItem is usually tangible
Example: newspaper
oHowever, there are cases where there are intangible services
Example: concert performance
Specialization and division of labour will lead to a production surplus
oExample: George is a good weaver, bad farmer. Elaine is a good farmer, bad
weaver. It is beneficial for both to specialize in each other’s line of work to
increase production
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Tuesday, September-15-09 Principles of Marketing Chapter 1
However, they are not better off until they actually trade their products,
thereby creating the exchange process
Exchange is the origin of marketing activity
Marketing has been described as the process of creating and resolving exchange
relationships
Production is not meaningful until a system of marketing has been established
Marketing Defined
Macro level (societal)
oMarketing is defined as the development of systems that direct an economy’s flow
of goods from producers to consumers
Marketing is the fuel that drives the engines of the economy
Micro level (organizational)
oMarketing is defined as everything that an organization does to stay in tune with
its customers or clients in order to ensure that the organizations products or
services continue to effectively meet the customers needs
Marketing is 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
othis implies much more than you may at first think
The Successful Organization
The Successful Organization is more geared towards closing the gap between the
organization and the customers
Increase the likelihood of desired exchanges taking place through production and
marketing
Utility is the want-satisfying power of a product or service
oOrganizational function increase this
oFour basic types
Form
Is created when the firm converts raw materials and components
into finished products and services
Time
Is created when products and services are available to the
consumer when she or he wants to purchase them
Place
Is created when a product is available at a convenient location
Ownership
Is created when facilities are available whereby title to the product
or service may be transferred at the time or purchase
oMarketing directly creates the utilities of: time, place, and ownership
Three Types of Business Orientation
Most companies have orientation that fits at least one of the three categories
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Description
Tuesday, September-15-09 Principles of Marketing Chapter 1 INTRODUCTION Marketers are increasingly forming a sort of relationship with their customers based on information gleaned from extensive databases o Example: retailers track your shopping history Marketing is more than just advertising and selling Marketing is all about matching producers output to customers activities Idea of matching producers output to customers activities sounds less complicated than it really is o There are many product and company failures The cause of poor marketing is usually a lack of focus on customers Marketing is the business function that interprets customer needs to the rest of the organization and brings the resulting offerings of the firm to the customer Consumer perceptions, attitudes, time constraints, space, lack of information and location are all things that contribute to the gap between producers and consumers o There is a bridge that marketing must build to close the gap, and it is built through the eight marketing functions Buying Selling Transporting Storing Grading Financing Risk taking Information collecting Disseminating o A reduction in the gap implies an increase in the utility consumers associate with a product or service The result is that consumers are more likely to enter into an exchange relationship with the marketing organization MARKETING IS ABOUT EXCHANGE Exchange process is when two or more parties give something of value to one another to satisfy felt needs. o Item is usually tangible Example: newspaper o However, there are cases where there are intangible services Example: concert performance Specialization and division of labour will lead to a production surplus o Example: George is a good weaver, bad farmer. Elaine is a good farmer, bad weaver. It is beneficial for both to specialize in each others line of work to increase production www.notesolution.com
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