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Chapter 1

Chapter 1 study notes Notes taken directly from the textbook. Level of detail is pretty good. See for yourself =)

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Wilfrid Laurier University
Rolf Seringhaus

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 o Good marketing is not random, it's planned • Marketing plan: specifies the marketing activities for a specific period of time o How 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 o Divide market into sub-groups or segments to whom they want to market their stuff to o Target 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 o i.e. Toothpaste may be for everyone, but segment into adults, kids, seniors etc. o Important 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 o Creating a product with benefits that consumer find valuable o Goods: items that people can physically touch o Services: intangible customer benefits that are produced by people or machines and cannot be separated from the producer (i.e. Concert) o Value can be things like convenience, low cost, fast, quality, easily accessible etc. o Ideas: thoughts, opinions, philosophies, and intellectual concepts that can be marketed • 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 o Price: everything the buyer gives up - money, time, effort, convenience, energy etc. o Determined carefully based on what potential buyers think of the value of the product o For 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 o Place: all the activities necessary to get the product from the manufacturer to the customer o Efficient 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 o Communicate value to the customer o Informing, persuading, and reminding potential customers about a product or service to influence their opinions or elicit a response o Generally 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 o i.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!) Marketing Helps Create Value History of Marketing Production-Oriented Era o Goods would sell itself because there were so little goods back then, any production will be bought (Demand > supply) o Product-oriented companies focus on developing and distributing innovative products with little concern whether the products satisfies consumers' needs Sales-Oriented Era o Supply > Demand - people consumed less due to WWII and Great
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