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Chapter 11

RSM100Y1 Chapter Notes - Chapter 11: Retail


Department
Rotman Commerce
Course Code
RSM100Y1
Professor
Michael Szlachta
Chapter
11

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CHAPTER11:CUSTOMERDRIVENMARKETING
WHATISMARKETING?
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itsstakeholders
Marketingtechniquesdon’tjustsellgoods/services,theyalsohelppeoplesupportideasand/or
educationthem
Marketingisaprocessthatdiscoversunmetcustomerneedsandcontinuestoresearchthe
potentialmarket,produceagood/servicethatcansatisfytargetedcustomersand
promote/price/distributethatgood/service
Exchangeprocess:anactivityinwhichtwoormorepartiestradesomethingofvalue(goods,
servicesorcash)thatsatisfieseachother’sneeds
Utility:theability/powerofagood/servicetosatisfythecustomer’swantsorneeds
acompany’sproductionfunctioncreatesformutilitybyconvertingrawmaterials,component
partsandotherinputsintofinishedgoodsorservices
Marketingfunctioncreates3typesofutility:
1. Timeutility:bymakingagoodorserviceavailablewhencustomerswanttopurchaseit
2. Placeutility:bymakingagoodorserviceavailableatalocationconvenientfor
customers
3. Ownershiputility:anorganizationaltransferofgoodsorservicesfromsellertobuyer
Evolutionofthemarketingconcepthasevolvedover4eras:
1. Production:agoodproductwillsellitself
2. Sales:Creativeadvertisingandsellingwillovercomeconsumers’resistanceand
convincethemtobuy
3. Marketing:Theconsumerisking!Findaneedandfillit
4. Relationship:Longtermrelationshipsleadtosuccess
MarketingConcept:acompanywideconsumerfocusonpromotinglongtermsuccess
Themarketingconcepthappenedwhentherewasashiftfromaseller’smarket
(amarketwith
ashortageofgoodsandservices)intoabuyer’smarket
(amarketwithasurplusofgoodsand
services)
NOTFORPROFITANDNONTRADITIONALMARKETING
Canadahasmorethan160,000registerednotforprofitorganizationsthatemploymorethan2
millionpeople
● About12.5millioncanadiansvolunteerwithnotforprofitorganizations
● Operateinbothpublicandprivatesectors
● Oftenuseoneormoreofthefivemajorcategoriesofnontraditionalmarketing
Categoriesonnontraditionalmarketing:
● PersonMarketing:effortsthataredesignedtoattracttheattention,interestand
preferenceofatargetmarkettowardsaperson
● PlaceMarketing:anattempttoattractpeopletoaparticularareasuchasacity,region,
orcountry
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● EventMarketing:Marketingorsponsoringofshorttermeventssuchasathletic
competitionsandculturalandcharitableperformances
● CauseMarketing:marketingthatpromotesacauseorsocialissuesuchaspreventing
childabuse,antilitteringeffortsandstopsmokingcampaigns
● 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
DEVELOPINGAMARKETINGSTRATEGY
Foranysuccessfulorganization,decisionmakersfollowatwostepprocesstodevelopa
marketingstrategy
1. Studyandanalyzeallpossibletargetmarketsandchoosethemostsuitablemarket
2. Createamarketingmixtosatisfythechosenmarket
Amarketingplanisakeypartofafirm’soverallbusinessplan
Marketingplanoutlinesafirm’smarketingstrategywhichalsoincludesinformationaboutthe
targetmarket,salesandrevenuegoals,themarketingbudget,andthetimingforimplementing
theelementsofthemarketingmix
marketingstrategyisbestdescribedbytheexpression“findaneedandfillit”
Market:peoplewhohavepurchasingpower,awillingnesstobuy,andtheauthoritytomake
purchasedecisions
Consumer(B2C)product:agoodorservicethatispurchasedbyendusers
Ex.tomatosauce,GPS,haircuts
Business(B2B)product:agoodorservicepurchasedtobeused,eitherdirectlyorindirectly,
intheproductionofothergoodsforresale
SomegoodscanbebothB2CorB2Bdependingonwhopurchasesit,forexampleacomputer
canbeusedbybothabusinessandaconsumer
TargetMarket:agroupofpeoplethatanorganizationmarketsitsgoods,services,orideas
toward,usingastrategydesignedtosatisfythegroup’sspecificneedsandpreferences
MarketingMix:Ablendingofthefourelementsofmarketingstrategyproduct,distribution,
promotion,andpricingtosatisfychosecustomer
● ProductStrategy:Involvesmorethanjustdesigningagood/servicebyaddingneed
quantities,italso
● DistributionStrategy:Thesecondmarketingmixvariable,ensuresthatcustomers
receivetheirpurchasesintheproperquantitiesattherighttimesandlocations
● PromotionStrategy:effectivelyblendsadvertising,personalselling,salespromotion,
andpublicrelationstoachieveitsgoalsofinforming,persuadingandinfluencing
purchasedecisions
● PricingStrategy:Finalelement,needtosetprofitableandjustifiablepricesfortheir
productofferings.Mustsometimescomplywithgov’tregulationandmayreceive
considerablepubliccriticism.Mustrepresentapowerfulcompetitivestrategy
MarketingResearch:theprocessofcollectingandevaluatinginformationtosupport
marketingdecisionmaking
● Needsbothinternalandexternaldata
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