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Chapter 1

Chapter 1 BU352.docx

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Department
Business
Course
BU352
Professor
Dave Ashberry
Semester
Fall

Description
BU352 Chapter 1 – What is Marketing? Week 1 What is Marketing? -Marketing – a set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships -Good marketing is not a random activity; it requires thoughtful planning with an emphasis on the ethical implications of any of those decisions on consumers and society in general -Marketing plan – a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income and other financial statements Marketing is About Satisfying Customer Needs and Wants -Need – a person feeling physiologically deprived of basic necessities, such as food, clothing, shelter and safety -Want – the particular way in which a person chooses to satisfy a need, which is shaped by a person’s knowledge, culture, and personality -To understand customer needs and wants, the company must first identify the customers or market for its product or service -Market – refers to the groups of people who need or want a company’s products or services and have the ability and willingness to buy them -Although marketers would like to sell their products and services to everyone, it is not practical to do so -Marketers divide the market into subgroups or segments of people to whom they are interested in marketing their products, services, or ideas -Target market – the customer segment or group to whom the firm is interested in selling its products and services Marketing Entails Value Exchange -Exchange – the trade of things of value between the buyer and the seller so that each is better off as a result -Ex. When you purchase a new Justin Bieber CD, you are engaging in a marketing exchange. You get the song, and the exchange partners get money and information about you Marketing Requires Product, Price, Place, and Promotion Decisions -Marketing mix (four Ps) – Product, price, place, and promotion – the controllable set of activities that a firm uses to respond to the wants of its target markets Product: Creating Value -One main purpose of marketing is to create value by developing a variety of offerings, including goods, services, and ideas to satisfy customer needs -Goods – items that can be physically touched -Services – intangible customer benefits that are produced by people or machines and cannot be separated from the producer -Many offerings represent a combination of goods and services – Ex. Going to see a Taylor Swift concert vs. buying her CD -Ideas – include thoughts, opinions, philosophies, and intellectual concepts Price: Transacting Value -Price – the overall sacrifice a consumer is willing to make – money, time, energy – to acquire a specific product or service BU352 Chapter 1 – What is Marketing? Week 1 Place: Delivering Value -All the activities necessary to get the product from the manufacturer or producer to the right customer when the customer wants it -Place decisions are concerned with developing an efficient system for merchandise to be distributed in the right quantities to the right locations, and at the right time in the most efficient way in order to minimize system wide costs while satisfying the service levels required by their customers Promotion: Communicating Value -Even the best products and services will go unsold if marketers cannot communicate their value to customers -The four Ps work together. Although marketers deliver value through each of the four Ps individually, they can deliver greater value to consumers by configuring the four Ps as a whole rather than by treating them as separate components Marketing is Shaped by Forces and Players Within the Firm -A company’s marketing activities are shaped by factors that are both internal to the firm and external to the firm -For marketers to deliver the best value to their customers, they must leverage the full potential of their internal capabilities; work effectively with their partners; and constantly evaluate and respond to the competitive environment Marketing is Shaped by Forces and Players External to the Firm -External forces such as cultural, demographic, social, technological, economic, and political and legal changes shape a company’s marketing activities Marketing Can Be Performed by Both Individuals and Organizations -B2C (Business-to-consumer) – the process in which businesses sell to consumers -B2B (Business-to-business) – the process of selling merchandise or services from one business
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