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Chapter 11

RSM100Y1 Chapter 11 Notes

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University of Toronto St. George
Rotman Commerce
Michael Khan

RSM100Y1 Textbook Notes Chapter 11  Marketing: an organizational function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and is stakeholders.  Marketing begins with discovering unmet customer needs and continues with researching the potential market; producing a good/service that can satisfy the targeted customers; and promoting, pricing, and distributing that good or service.  Exchange Process: an activity in which two or more parties trade something of value (such as goods, services, or cash) that satisfies each other’s needs.  Utility: the power of a good or service to satisfy a consumer want/need.  Production creates: o Form Utility: converting raw materials, component parts, and other inputs into finished goods and services.  Marketing creates: o Time Utility: making a good or service available when customers want to purchase it. o Place Utility: making a product available in a location convenient for customers. o Ownership Utility: an organized transfer of goods and services from the seller to the buyer.  Marketing Concept: a companywide consumer focus on promoting long-term success.  Emergence of the marketing concept is best explained by the shift from a seller’s market (shortage of goods/services, to a buyer’s market (too many goods/services). 1950’s Canada was a buyer’s market.  Celebrities often play a big role in not-for-profit organizations raising funds for their missions.  Not-for-profit organizations often use one or more of the non-traditional methods of marketing: o Person Marketing  Efforts that are designed to attract the attention, interest, and preference of a target market toward a person. (i.e. Sidney Crosby and Tim Hortons) o Place Marketing  An attempt to attract people to a particular area, such as a city, region, region, or country. (i.e. 3 mascots of Vancouver Olympics sold 2 year in advance) o Event Marketing  Marketing or sponsoring of short-term events such as athletic competitions and cultural and charitable performances. (i.e. Canadian Diabetes Association sponsoring marathons)  Event marketing often leads to partnerships between not-for- profit and for-profit organizations. o Cause Marketing  Marketing that promotes a cause or social issue, such as preventing child abuse, anti-littering efforts, and stop-smoking campaigns. o Organization Marketing  A marketing strategy that influences consumers to accept the goals of an organization, receive the services of an organization, or contribute in some way to an organization. (i.e. U of T)  A firm’s marketers study the individuals and business decision-makers in its potential market to find a need.  A market consists of people who have purchasing power, a willingness to buy, and the authority to make purchase decisions.  There are two types of products: o Consumer products: goods and services that are purchased by end users (B2C). o Business products: goods and services purchased to be used, either indirectly or directly, in making other goods that will be resold (B2B).  Target Market: a group of people that an organization markets its goods, services, or ideas toward, using a strategy designed to satisfy this groups specific needs and preferences.  Marketing Mix: a blending of the four elements of marketing strategy – product, distribution, promotion, and pricing – to satisfy chosen customer segments.  Product strategy: more than designing a good/service by adding needed qualities. Also includes decision about package design, brand names, trademarks etc.  Distribution strategy: ensures that customers receive their purchases in the proper quantities at the right times and locations.  Promotional strategy: effectively blends advertising personal selling, sales promotion, and public relations to achieve its goals of informing, persuading, and influencing purchase decisions.  Pricing strategy: firms need to set profitable and justifiable prices for their product offerings.  Firms can decide to offer the same marketing mixtures in foreign markets (standardization) or develop a unique mix to fit each market (adaptation).  Mass customization allows a firm to mass-produce goods and services while also adding unique features to individual or small groups of orders.  Marketing Research: the process of collecting and evaluating information to support marketing decision-making.  It links business decision-makers to the marketplace by providing data about potential target markets that help them design effective marketing mixes.  A firm can gather information from: o Internal Data  Data published within their organization (i.e. financial records that show inventory levels). o External Data  Data published by other organizations (i.e. data collected from advertising agencies). o Secondary Data  Previously published data that is low cost and easy to obtain (i.e. census from the government). o Primary Data  Data collected firsthand through such methods as observation and surveys. o Focus Group  A group of 8-12 people who discuss a specific topic or test products before they come out for sale to the general public. The group will give their opinions and changes (if any) will be made accordingly.  Business Intelligence: a field of research that uses activities and technologies for gathering, storing, and analyzing data to make better competitive decisions (i.e. Dell’s IdeaStorm).  Data Mining: the task of using computer-based technology to evaluate data in a database and identify usefu
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