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Chapter 01 – The Art and Science of Satisfying Customers Learning Objective 1 What is Marketing? Want-satisfying power of a good or service Identifying consumer needs Definition of Marketing Designing products that meet those needs Communicating information about products, prospective, customers Making items available at times and places meeting consumer needs Pricing products to reflect costs, competition & customers’ ability to pay Marketing activities include Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders Goods & services offered by marketers provide Providing necessary service and following up post purchase Learning Objective 2 Four Eras in the History of Marketing Production Era Sales Era Marketing Era Form Utility – conversion of raw materials and components into finished goods & services Time Utility – availability of goods and services when consumers want them Utility Place Utility – availability of goods and services at convenient locations Ownership Utility – Ability to transfer title to goods and services from a marketer to buyer Relationship Era Production Orientation Sales Orientation Consumer Orientation Relationship Marketing Business philosophy stressing Belief that consumers will resists purchasing non-essential goods and services, with the attitude toward marketing that only creative advertising and personal selling can overcome this resistance. Business philosophy incorporating the marketing concept that emphasizes in first determining unmet consumer needs and then designing a system for satisfying them. Development and maintenance of long term cost effective relationships with individual customers, suppliers, employees and other partners for mutual benefit. efficiency in producing a quality product, with the attitude toward marketing that; “a good product will sell itself” Copyright © 2013 Nelson Education Ltd. Learning Objective 3 Marketing Myopia Marketing Myopia – management failure to recognize the scope of its business. Businesses that are product oriented may be seen as myopic since they endanger their future growth. Learning Objective 4 & 5 Extending Traditional Boundaries of Marketing Marketing in Not for Profit Organizations Categories of Non Traditional Marketing Person Marketing – Marketing efforts designed to cultivate the attention, interest and preference of a target market toward a person (Typically a political candidate or a celebrity) Characteristics of Not for Profit Marketing • Not for profit organizations hope to generate revenue to support their causes and uses cost effective ways to achieve them. Their motive is not to chase behind the bottom line Place Marketing – Marketing efforts to attract people and organizations to a particular geographic area (company profitability) of an organization • Not for profit organizations also pursue Cause Marketing – Identification and marketing of a social issue, cause, or idea to selected target markets marketing activities to promote their causes • These organizations may have less control over the organization’s destiny than profit Event Marketing – Marketing of sporting, cultural and charitable activities to selected target markets seeking firms • Not for profit organizations may have some degree of monopoly power within a given geographical area of operations Organizational Marketing – Marketing by mutual benefit organizations, service organizations and government organizations intended to influence others to accept their goals, receive their services or contribute to them in some way Copyright © 2013 Nelson Education Ltd. Learning Objective 6 From Transactional Based Marketing to Relationship Marketing Relationship Marketing Transactional Marketing Buyer and seller exchanges characterized by limited communications and little or no ongoing relationships between the parties NEW CUSTOMERS REGULAR CUSTOMERS LOYAL SUPPORTER Mobile Marketing Interactive Marketing Marketing messages transmitted via wireless technology communications in which the customer controls the amount and type of information received from a marketer through such Relationship marketing does not only apply to individual consumers and employees Social Marketing The use of online social media as communications channel for marketing messages Buzz Marketing Word of mouth messages that bridge the gap between a company and its products • The formation of strategic alliances between companies that forms the supply chain is a common trend Affects business to business relationships and with the firm’s suppliers and distributors channels as the internet and virtual reality kiosks ADVOCATE Developing Partnerships & Strategic Alliances with Suppliers Using Interactive and Social Marketing to Build Relationships with Customers Buyer-seller Development and maintenance of long term cost effective relationships with individual customers, suppliers, employees and other partners for mutual benefit Converting New Customers to Advocates • A strategic alliance is a partnership in which two or more companies combine resources and capital to create competitive In the past suppliers were seen as adversaries which must fiercely negotiate prices. Today that view has changed to where both marketers and suppliers enjoy the benefits of building collaborative relationships Copyright © 2013 Nelson Education Ltd. advantages in a new market • Not for profit organizations often make use of strategic alliances to raise awareness and funds for their cause or to achieve their goals Buying Ensure product offers are available in sufficient quantities to meet consumer demand Selling Using advertising, personal selling and sales promotion to match products to consumer needs Learning Objective 8 Ethics and Social Responsibility • Some organizations may fall short following an ethical code of conduct in Ethics – are moral standards of behaviour expected by a society engaging with marketing activities Exchange Functions • Following an ethical code of conduct is an important aspect for any business Transportation Storing Moving products from their point of production to locations convenient for purchases Warehousing products until needed for sale • It is applicable for both public as well for private sector organizations Social Responsibility – • marketing philosophies, programs as part of their overall policies, procedures Learning Objective 7 Universal Functions of Marketing and actions that have mission • the enhancement of society’s welfare Risk Taking Financing Dealing with uncertainty about future customer purchases Providing credit for channel members (wholesale and retailers) and consumers Many firms include social responsibility as a primary objective They produce benefits such as improved customer relationships, increased employee loyalty, market place success and improved financial performance • Sustainable products balance the needs of industry, economy with the needs of the environment • Standardizing and Grading Ensuring product offerings meet quality and quantity controls of size, weight and other variables Securing Marketing Information Collecting information about consumers, competitors and channel members for use in making marketing decisions For it to be successful, it should penetrate a firm’s corporate strategy • Public affairs and communications personnel in marketing are involved with sustainability Copyright © 2013 Nelson Education Ltd. Sustainable products – that can be produced, used and disposed of with minimal impact on the environment