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Chapter 5

Chapter 5- Understanding Marketing Markets Segmentation and Market Research


Department
Management (MGT)
Course Code
MGTA02H3
Professor
Bill Mc Conkey
Chapter
5

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Chapter 5- Understanding Marketing: Markets Segmentation and Market Research
1- Explain the concept of marketing and describe the five forces that constitute
the external marketing environment
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 sellers
objectives
Peoples needs and wants for goods and services are the forces that drive
marketing
Marketing concept- the idea that the whole firm is directed toward serving present and
potential customers at a profit
Must get to know what customers really want and follow closely the changes in
tastes that occur
Providing Value and Satisfaction
Customers buy products that offer the beat value when it comes to meeting their
needs and wants
Value and Benefits
Value- comparison of a products benefits vs. its costs
Benefits- the functions and emotional satisfaction combined with owning, experiencing,
or possessing the product
Different types of benefits:
oMaking an entirely new product that performs better (provides greater
benefits) than existing products
oKeeping a store open extra hours during a busy season (adding benefits
of greater shopping convenience)
oOffer price reductions (the benefit of lower cost)
oInformational promotion that explains how a product can be used in new
ways
Value and Utility
Utility- ability of a product to satisfy a human need or want
Time utility- makes products available when consumers want them
Place utility- makes products available where customers can easily purchase
them
Ownership utility- easily transferring ownership from store to customer
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Costs
Benefits
Value
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Form utility-turning raw materials into finished goods
Goods, Services, and Ideas
Consumer goods- products purchased by individuals for their personal use
Consumer marketing- firms that sell products for personal consumption
Industrial goods- products purchased by companies to use directly or indirectly to
produce other products (Ex: surgical instruments and earthmovers)
Industrial marketing- firms that sell products to other manufactures
Services- intangible products, such as time, expertise, or an activity that can be
purchased
Service marketing- firms sell services to consumers and other companies (Ex:
insurance companies, airlines, etc)
2- Explain the purpose of a marketing plan and identify the four components of
the marketing mix
Strategy: The Marketing Mix
Marketing managers- managers responsible for planning and implementing all the
marketing-mix activities that result in the transfer of goods or services to customers
Marketing plan- a detailed strategy for gearing the marketing mix to meet consumers’
needs and wants
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 wants
Marketers must consider the factor of change (technology, consumers needs
and wants, and economic conditions)
Mass-customization- marketers to provide products that satisfy very specific needs of
consumers
Product differentiation- the creation of a product or product image that differs enough
from existing products to attract consumers
Price
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