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Chapter 1

BU352 Chapter Notes - Chapter 1: Bic Cristal, Paper Mate, Retail


Department
Business
Course Code
BU352
Professor
Rolf Seringhaus
Chapter
1

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Overview of Marketing
Marketing: a set of business practises designed to plan for and present an
organization's products or services in ways that build effective customer
relationships
oGood marketing is not random, it's planned
Marketing plan: specifies the marketing activities for a specific period of time
oHow the product will be conceived, how much should it cost, where
and how it will be promoted, and how it will get to the customer
Marketing is about Satisfying Customer Needs and Wants
Understanding and satisfying needs and wants is fundamental to marketing
success
Need: basic necessities of life
Want: not a necessity - a particular WAY in which you satisfy your needs - i.e.
You NEED a pen, but it's up to you if you want a BIC pen or a Papermate pen
Market: refers to the groups of people to whom an organization is interested
in marketing its products to
In order to understand customers' needs and wants, must know who is your
market
Generally, market is whoever willing and has the ability to purchase, however
not practical to marketers to market to such a large group
oDivide market into sub-groups or segments to whom they want to
market their stuff to
oTarget market: customer segment to whom the firm is interested in
selling their stuff; potential customers who have both an interest in the
product and service and an ability to buy
oi.e. Toothpaste may be for everyone, but segment into adults, kids,
seniors etc.
oImportant because you need to know your target market to form your
marketing strategy
Marketing Entails Value Exchange
Marketing is about an EXCHANGE (trade of things of value between the
buyer and the seller so that each is better off as a result)
You give money, they give product/service
Marketing Requires Product, Price, Place, and Promotion Decisions
Marketing Mix: the controllable set of activities that a firm uses to respond to
and wants of its target markets
Product - Creating Value
oCreating a product with benefits that consumer find valuable
oGoods: items that people can physically touch
oServices: intangible customer benefits that are produced by people or
machines and cannot be separated from the producer (i.e. Concert)
oValue can be things like convenience, low cost, fast, quality, easily
accessible etc.
oIdeas: thoughts, opinions, philosophies, and intellectual concepts that
can be marketed
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i.e. Groups promoting bike safety (intellectual concepts) to a
targeted audience of young kids. When they buy into the idea and
wear helmets, they have essential "bought" the service.
Price - Transacting Value
oPrice: everything the buyer gives up - money, time, effort,
convenience, energy etc.
oDetermined carefully based on what potential buyers think of the value
of the product
oFor marketers, key to determining prices is figuring out how much
customers are willing to pay so that they are satisfied with the purchase
and the seller achieves a reasonable profit
Place - Delivering Value
oPlace: all the activities necessary to get the product from the
manufacturer to the customer
oEfficient system for merchandise to be distributed in the right
quantities, to the right locations, and at the right time, in the most efficient
manner (to minimize system costs)
Promotion - Communicating Value
oCommunicate value to the customer
oInforming, persuading, and reminding potential customers about a
product or service to influence their opinions or elicit a response
oGenerally marketing can enhance the value of the product - instead of
the value of the product being durable jeans, it could be turned into stylish,
sexy jeans
Marketing is Shaped by Forces and Players External to the Firm
Such as social, technological, economic, competitive, and regulatory changes
i.e. Trends for being environmentally friendly - package using recycled
material
Firm's relations with suppliers, distributors, other intermediaries, and
advocacy groups affect its marketing decisions
oi.e. KFC and relation to advocacy group PETA affects their marketing
strategy
Marketing Can Be Performed by Both Individual and Organizations
B2C (Business to Consumer) marketing and B2B (Business to Business)
marketing
Some businesses engage in both B2C and B2B marketing simultaneously
C2C (Consumer to Consumer) marketing is becoming popular with the rise of
Ebay and auction sites
Firm (Producer) --B2B --> Firm (Buyer) --B2C--> Consumer A --C2C--> Consumer
B
Marketing Occurs in Many Settings
Marketing now only to make profit, look at non profits and educational
institutions
Marketing also occurs in less developed countries
Marketing is often designed to benefit an entire industry (i.e. Drink milk!)
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