Textbook Notes (378,251)
CA (167,133)
UTSC (19,205)
MGT (1,095)
MGTA02H3 (363)
Chapter 5

Chapter 5 Notes

10 Pages
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Department
Management (MGT)
Course Code
MGTA02H3
Professor
Chris Bovaird

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Social and Cultural Environment
-issues reflect the values, beliefs, and ideas that form the fabric of Canadian society today
-we continue to insist on agreener” Canada, we have seen the fall of Freon in air conditioners
and increased reliance on recycling materials in the goods we consume
-changing social values force companies to develop and promote new products for both
individual consumers and industrial consumers
-example, Dot-com sites collect personal information but consumers want privacy
-therefore there has been a growing demand for better privacy protection
Technological Environment
-they create new goods and services such as satellite dishes
-new products make some existing products obsolete (example, compact discs are replacing
audiotapes
-they often stimulate new goods and services not directly related to the new technology itself
-cell phones are not only used for business communication, for also for recreation and leisure
-DNA fingerprinting is a product
-it involves marketing decisionssuch as pricing and promotion
Economic Environment
-determine spending patterns by consumers, businesses, and governments
-markets are mostly concerned with inflation, interest rates, recession, and recovery
-the business cycle must be monitored which features a pattern of transition from periods of
prosperity to recession to recovery (return to prosperity)
-consumer spending increases asconsumer confidence” in economic conditions grows during
periods of prosperity
-it decreases during low-growth periods, when unemployment rises and purchasing power
declines
-nations form more and more economic connections, the “global economy is becoming more
prominent in the thinking of marketers everywhere
Competitive Environment
-markets must convince buyers that they should purchase their products instead of those of other
sellers
-each marketing program seeks to make its product the most attractive
-a failed program loses the buyer’s dollar forever
-three specific types of competition are:
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Substitute products: a product that is dissimilar form those of competitors but that can
fulfil the same need
Brand competition: competitive marketing that appeal to consumer perceptions of
similar products. The competition is based on buyers’ perceptions of the benefits of
products offered by particular companies
International competition: competitive marketing of domestic against foreign products,
example Air Canada and Swissair
Strategy: The Marketing Mix
-marketing managers: managers responsible for planning and implementing all the market-mix
activities that result in the transfer of goods and services
-marketing plan: a detailed strategy for gearing the marketing mix to meet consumer needs and
wants
-marketing begins when a company identifies a consumer need and develops a product
-marketing managers develop the four basic components (called the “Four Ps)
-marketing mix: the combination of product, price, place, and promotion strategies used in
marketing a product
Product
-product: a good, service, or idea that satisfies buyers’ needs and demands
-developing new products is often a challenge for marketers
-markets should consider the factor of change—changing technology, changing consumer wants
and needs, and changing economic conditions
-existing products might be changed to keep pace with emerging markets and competitors
-mass customization allows marketers to provide products that satisfy very specific needs of
consumers
-producers promote particular features to distinguish them in the marketplace
-product differentiation: the creation of a product or product image that differs enough from
existing products to attract consumers
Price
-price refers to the total value of things that consumers are willing to give up in return for being
able to have the benefits of the product or service
-price: the part of the marketing mix concerned with choosing the appropriate price for a product
to meet the firms profit objectives and buyers’ purchasing objectives
-price must support a variety of costs—operating, administrative, research, and marketing costs
-prices cannot be so high that consumers turn to competitor products
-both low and high-price strategies can be effective in different situations
www.notesolution.com
-low prices generally result in larger sales
-high prices usually limit market size but increase profits per unit
-high prices represent better quality, which attract customers
Place (Distribution)
-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
-decisions about warehousing, inventory control, and transportation are distribution decisions
-the channels through which the products are distributed must be decided
-manufacturers may sell goods to other companies that distribute them to retailers
-manufacturers may sell directly to major retailers such as Wal-mart
-others sell directly to final customers
Promotion
-promotion: techniques for communicating information about products
-promotion tools are advertising, personal selling, sales promotion, and public relations
-product, price, place, and promotion focus on the seller’s perspective
-each of the 4 Ps provides a benefit to the customers
-the seller’s 4 Ps are a mirror image of the buyers 4 Cs
-the 4 Cs are: customer solution (product), customer cost (price), customer convenience (place),
and customer communication (promotion)
TARGET MARKETING AND MARKET SEGMENTS
-target markets: are group of people who have similar wants and needs and may be expected to
show interest in the same product (s).
-market segmentation: dividing a market into categories, according to traits customers have in
common
-once market segments have been identified, companies may adopt a variety of product strategies
-some firms provide a range of products in the market in order to market their products to more
than one segment
- some businesses restrict production to one market segment
-segmentation is a strategy for analyzing consumers, not products
-positioning is the process of fixing, adapting, and communicating the nature of the product
itself
Identifying Market Segments
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Description
Social and Cultural Environment -issues reflect the values, beliefs, and ideas that form the fabric of Canadian society today -we continue to insist on a greener Canada, we have seen the fall of Freon in air conditioners and increased reliance on recycling materials in the goods we consume -changing social values force companies to develop and promote new products for both individual consumers and industrial consumers -example, Dot-com sites collect personal information but consumers want privacy -therefore there has been a growing demand for better privacy protection Technological Environment -they create new goods and services such as satellite dishes -new products make some existing products obsolete (example, compact discs are replacing audiotapes -they often stimulate new goods and services not directly related to the new technology itself -cell phones are not only used for business communication, for also for recreation and leisure -DNA fingerprinting is a product -it involves marketing decisionssuch as pricing and promotion Economic Environment -determine spending patterns by consumers, businesses, and governments -markets are mostly concerned with inflation, interest rates, recession, and recovery -the business cycle must be monitored which features a pattern of transition from periods of prosperity to recession to recovery (return to prosperity) -consumer spending increases as consumer confidence in economic conditions grows during periods of prosperity -it decreases during low-growth periods, when unemployment rises and purchasing power declines -nations form more and more economic connections, the global economy is becoming more prominent in the thinking of marketers everywhere Competitive Environment -markets must convince buyers that they should purchase their products instead of those of other sellers -each marketing program seeks to make its product the most attractive -a failed program loses the buyers dollar forever -three specific types of competition are: www.notesolution.com
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