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Chapter 5

Chapter 5

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

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Chapter 5 Understanding Marketing: Markets
Segmentation and Market Research
WHAT IS MARKETING?
-Marketing is planning and executing the development, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that satisfy both
buyers and sellers objectives.
-The marketing concept is the idea that the whole firm is directed toward serving
present and potential customers at a profit.
oThe firm must get to know what customers really want and follow closely the
changes in tastes that occur.
Providing Value and Satisfaction
Value and Benefits
-Value is relative comparison of a products benefits versus its costs.
-Benefits include not only the functions of the product, but also the emotional
satisfaction associated with owning, experiencing, or possessing it.
-Value = Benefits / Costs
-Marketing strategies focus on increasing value for customers.
Value and Utility
-Utility is ability of a product to satisfy a human want or need.
-Marketing strives to provide four kinds of utility:
oTime utility it makes products available when consumers want them.
oPlace utility it makes products available where customers can conveniently
purchase them.
oOwnership utility it provides ownership utility by conveniently transferring
ownership from store to customer.
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oForm utility by making products available in the first place by turning raw
materials into finished ornaments.
Goods, Services, and Ideas
-Consumer goods are products purchased by individuals for their personal use.
oFirms that sell products to consumers for personal consumption are engaged
in consumer marketing.
-Industrial goods are products purchased by companies to use directly or indirectly to
produce other products.
oFirms that sell products to other manufacturers are engaged in industrial
marketing.
-Services are intangible products, such as time, expertise, or an activity that can be
purchased.
-Service marketing has become a major growth area in Canada.
-Markets provide ideas too.
Strategy: The Marketing Mix
-Marketing managers are managers responsible for planning and implementing all
the marketing-mix activities that result in the transfer of goods or services to
customers.
-Marketing plan is a detailed strategy for gearing the marketing mix to meet
consumer needs and want.
-Marketing mix is the combination of product, price, place, and promotion strategies
used in marketing a product.
-The sellers 4 Ps are a mirror image of the buyers 4 Cs: customer solution (product),
customer cost (price), customer convenience (place), and customer communication
(promotion).
Product
-Product is a good, service, or idea that satisfies buyers needs and demands.
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-Meeting consumer needs often means changing existing products to keep pace with
emerging markets and competitors.
-Mass-customization allows marketers to provide products that satisfy very specific
needs of consumers.
-Product differentiation is the creation of a product or product image that offers
enough from existing products to attract consumers.
Price
-Price is that part of the marketing mix concerned with choosing the appropriate
price for a product to meet the firms profit objectives and buyers purchasing
objectives.
-Prices must support a variety of costsoperating, administrative, research, and
marketing costs.
-Prices also cant be so high that consumers turn to competitor products.
-Low prices generally lead to larger sales volumes.
-High prices usually limit market size but increase profits per unit.
Place (Distribution)
-Distribution is that part of the marketing mix concerned with getting products from
the producer to the buyer, including physical transportation and choice of sales
outlets.
-Firms may also make decisions about the channels through which they distribute
products.
Promotion
-The most highly visible component of the marketing mix is promotion.
-Promotion is techniques for communicating information about products.
TARGET MARKETING AND MARKET SEGMENTATION
-Target markets are groups of people with similar wants and needs.
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Description
Chapter 5 Understanding Marketing: Markets Segmentation and Market Research WHAT IS MARKETING? - Marketing is planning and executing the development, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy both buyers and sellers objectives. - The marketing concept is the idea that the whole firm is directed toward serving present and potential customers at a profit. o The firm must get to know what customers really want and follow closely the changes in tastes that occur. Providing Value and Satisfaction Value and Benefits - Value is relative comparison of a products benefits versus its costs. - Benefits include not only the functions of the product, but also the emotional satisfaction associated with owning, experiencing, or possessing it. - Value = Benefits Costs - Marketing strategies focus on increasing value for customers. Value and Utility - Utility is ability of a product to satisfy a human want or need. - Marketing strives to provide four kinds of utility: o Time utility it makes products available when consumers want them. o Place utility it makes products available where customers can conveniently purchase them. o Ownership utility it provides ownership utility by conveniently transferring ownership from store to customer. www.notesolution.com
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