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MKTG 2030 - Week 1.docx

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Department
Marketing
Course
MKTG 2030
Professor
Linda Reeser
Semester
Winter

Description
MKTG 2030 Week 1 January 9, 2013 CHAPTER 1 – WHAT IS MARKETING? Welcome to Branded You - For companies, we are a product. - Value – benefits a customer receives from buying and using a good/service in relation to the costs and sacrifices of buying and using it. - Marketing is all around us – we “position” ourselves for a job interview, we are “on the market” after a breakup, some undergo plastic surgery to improve their “product image,” etc. - All marketers are real people who make decisions that affect themselves, their companies, and very often affect thousands of consumers. - Marketing – an organizational function and a set of process for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders - Marketing is the process of achieving individual and organizational objectives by creating superior customer value for one or more target markets w/ a sustainable strategy - Marketing is all about creating and delivering value, and doing this for all parties involves an exchange - Customer value – what the customer gets in the purchase, use, and ownership of a product relative to the costs and sacrifices incurred - Creating a fair exchange - the customer should feel that they are getting their money’s worth or more - The challenge to the marketer is to crate, price, distribute, and communicate an attractive value proposition to the customer to get the most value in return Marketing is about creating customer value - stakeholders – any person or organization that has a “stake” in the outcome of an economic exchange - consumer – ultimate user of a good/service, can be a person, organization (customer), gov’t, charity, or association - “customer is king (or queen) should ensure that all parties of an exchange are satisfied, not just the customer - marketing concept – focuses on achieving organizational objectives by understanding customer needs, and creating and delivering value in exchanges that satisfy the needs of all parties. A central idea to this philosophy is that organizations exist to create value for consumers where it is neither efficient not effective for consumers to attempt to satisfy their needs themselves - need – difference b/w a consumer’s actual state and some ideal or desired state. When the difference is large, consumer will want to satisfy the need. Needs depend on our psychological and physical conditions. Ex. when you’re hungry, you buy a snack - want – a desire for a particular product used to satisfy a need in specific ways that are culturally and socially influenced. Ex. 2 hungry people, one may want fries, the other may want trail mix - Consumers are motivated by needs, but make purchase decisions based on wants. - Benefit – satisfies a need or want - Customers care most about benefits – what’s in it for them – and typically less about the particular features or functions that deliver those benefits - Demand – customers’ desire for products couples w/ the resources to obtain them - Marketplace – any location or medium used to conduct an exchange ex. eBay, catalogues, stores - Increasing trend to integrate marketing w/ other business functions such as finance and actg to ensure that products are profitable, budgets are met, determining prices, working w/ manufacturing to ensure that products are produced in time, in the right quantity & quality MKTG 2030 Week 1 January 9, 2013 Marketing is about exchange relationships - Exchange is more than money and products: Wonderland exchanges experience for our time and money, politicians exchange promises for votes, celebrities exchange images for endorsements and company sales, etc. - For an exchange to occur, at least 2 people/organizations must be willing to make a trade, and each must be something the other wants Marketing as a decision-making process: Understanding marketing strategy: Marketing mix: Implementation & evaluation: the opportunity specify the value Creating the value realize the value (1) Understanding the opportunity The first step to understanding the opportunity is conduting a situational analysis to understand the market, industry, # and types of competitiors, skills & resources at hand, etc. (2) Marketing strategy: specify the value - market segment – distinct group of customers w/in a large market who have similar needs, wants, preferences, and behaviours, who seek similar product solutions, and whose needs differ from other customers in larger market - market segmentation – a process of dividing the overall market into groups of consumers who are sufficiently similar w/in the group to want a similar value offer and different enough from other groups to want a different value offer than those other groups - develop segment profiles – detailed descriptions of the characteristics, behaviours, and thinking of a market segment that help marketers design and present a valued offer - the chosen segment of the market segment(s) becomes the target market toward which a company directs its marketing efforts - some companies target their products to a mass market – all possible customers in a market, regardless of the differences in their specific needs and wants – not sufficient in the L/R b/c companies usually introduce new products that cause the mass market to split/erode - some MNCs focus on selling products to developing countries, a trend called B2-4B  business to four billion, which refers to the ~ potential customers in these markets. Ex. HP’s Third World initiative to donate $1US billion to developing countries to capture the talent that will allow them to stay competitive and capture potential talent - positioning – strategies to establish the unique value proposition of an offering and sustain its superiority in the eyes of target customers. This establishes how a brand will be known. Ex. Voss Water in Norway costs $22 for a 0.5 L bottle!! (3) Create the value: marketing mix decisions - 4 P’s of marketing – product, price, place (distribution) and promotion (communication) th - 5 P refers to people – relationships - no single marketing activity is sufficient to accomplish a company’s objectives, need consistency among all 4 P’s - product decisions include product concept (benefits offered through functions, features, design), product line (variants of a product – colour, sizes, flavors, models, etc.), service strategy, branding strategy (individual brand, store brand, etc.), and packaging - price includes pricing objectives (what to accomplish), pricing policies (ex. WalMart’s everyday low prices), price point (takes cost into consideration, competitor’s prices, consumer’s willingness to pay), and special discounts MKTG 2030 Week 1 January 9, 2013 - place includes channels of distribution (how widely or narrowly is the product available), supply chain mgmt. (ensures efficient and effective value creation from the sourcing of raw materials all the way to the customer) - promotion includes influencing consumers or organizations about goods/services/ideas by deciding an audience from the target market and strategizing the communication objective. Decide on an overall approach to communicate w/ the audience, decide the key messages and tactics to get their attention, and a creative strategy, schedule, and budget to implement the strategy. Ev
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