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Chapter 1

MKTG Chapt 1.docx

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Department
Marketing
Course
MKTG 2030
Professor
Neil Smith
Semester
Summer

Description
MKTG Chapt 1 Marketing is the activity, set of institutions and processes for creating, communicating, delivering and exchanging offers that have value for customers, clients, partners and society at large. -not limited to one functional area -set of institutions (i.e. not just companies) -exchange offerings (i.e. potential value) -value for society at large Focus on value creation Marketing is all about creating and delivering value for all parties involved in an exchange – involves decision making process and they are made by people who have official marketing roles Customer value: what the customer gets in the purchase, use and ownership of a product relative to the costs and sacrifices incurred. To create a transaction of value, both parties need to believe that the exchange is fair – what they get is worth more than they give up – the challenge to the marketer is to create price, distribute and communicate an attractive value proposition to the customer to get the most value in return Needs and Wants Need: difference between consumers actual state and some ideal or desired state –needs are related to physical conditions (cold, hungry, scared) or psychological conditions (being liked, communicate or being fulfilled) Want: desire to satisfy needs in specific ways that are culturally and socially influences – consumers are motivated by needs but make purchase decisions based on wants Product delivers a benefit when it satisfies a need or want – outcome sought by a customer that motivates buying behavior Challenge: -identify what people look for -develop a product that delivers the benefit -convince the buyer its better than the competitors product Exchange Relationships An exchange occurs when something is obtained for something else in return, like cash for goods and services -buyer receives a product or service that satisfies a need -seller receives something of equivalent economic value (usually money) -for exchange to occur atleast 2 people or organizations must be willing to trade  each must have something the other wants  must agree on value of exchange and how it will be carried out  free to accept/reject the offer Marketing as a decision making process AMA says marketing is a primarily decision making process that allows individuals and organizations to achieve objectives by creating value that satisfies stakeholder needs and wants – marketing decision involves careful planning and execution Marketing is a strategic decision making process in which marketing managers determine the most appropriate set of decisions for a particular organization at a particular time that will help the organization meet its long-term objectives – over-riding framework for thinking about marketing Contains 4 main components: 1) Understand the opportunity -Decisions start with understanding the situation, context in which the decision needs to be made Situational analysis: identifying opportunities to create value for customers and organizations Understand external environment – the market, trends, consumers, industry and competition internal environment – factors related to their own organization – current strategy, organization, skills and resources, preferences and values 2) Specify the value Marketing objectives (market share or sales target) must be aligned with organizational objectives (financial) – strategy is created to meet the objective Segmentation Market segment: distinct group of customers within a large market who have similar needs, wants, preferences and behaviors, who seek similar product solution and whose needs differ from other customers in the large market – marketers have to select specific groups of customers on whom they will focus their customer value creation efforts Mass market: all possible customers in a market, regardless of their differences in specific needs and wants (not tenable in the long run) – to reach as many customers as possible target products to a mass market Market segmentation: process of dividing the overall market into groups of consumers who are sufficiently similar within the group to want a similar value offer and different enough from other groups to want a different value offer than those groups  identify groups with real differences in underlying needs and preferences Segment profile: detailed description of the characteristics, behaviors and thinking of a market segment that helps marketers design and present a valued offer – targeting more than one segment then have specific positioning and marketing mix for each segment Target market: the market segments on which an organization focuses its marketing plan and towards which it directs it marketing efforts – weigh each segment in terms of profitability, ability to create value and then decide whether to focus on one or many segments -look for potentia
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