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Marketing 11 Chapter 1: Contemporary Marketing What is Marketing? p. 1-10 2007 Pearson Education Canada 1 Marketing Definition “A process that identifies a need and then offers a means (a good or service) of satisfying it.” All marketing is focused on a kind of transaction or exchange between the organization and the customer. 2007 Pearson Education Canada 2 In Other Words… What do people need (want)? How can I come up with a unique way of filling that need? – Unique! If you are going to introduce a new product, you had better make sure it’s not already been done by somebody else! 2007 Pearson Education Canada 3 Tim Horton’s: Ranked Canada’s Best-Managed Brand The reasons are all marketing related: – Strong customer service – Popular products – Prolific community involvement – A large number of locations – Implementation of an efficient business system to deliver products – Consistent delivery of brand promise 2007 Pearson Education Canada 4 Dell Computer Inc. Prior to Dell, all computer companies marketed computers the same way Dell markets custom-designed computers (made to customer specifications) directly to the customer Expensive distributions costs are eliminated Provides savings and convenience to customers Dell introduced a new form of exchange and new benefits 2007 Pearson Education Canada 5 Task of Marketing Collect, analyze, and apply information about customers. Develop marketing programs that respond to the changing needs & preferences of customers, including: – – – – products, prices, placement (or distribution), and promotion. “The goal of the company is to stay one step ahead of the competition by offering goods & services that provide customers with value, all the time.” 2007 Pearson Education Canada 6 Market-Driven Success A company requires knowledge of its competitors’ products and how customers view them. This is how McDonald’s remains number one in fast-food retailing, Nike number one in athletic shoes, and Wal-Mart number one in department store. 2007 Pearson Education Canada 7 The 4 P’s of Marketing Product Price Placement Promotion This will be on every marketing test you will ever take! So remember it! 2007 Pearson Education Canada 8 Marketing Past and Present Over time the orientation of business has changed: Production Sales Marketing Social Responsibility 2007 Pearson Education Canada 9 Production Orientation Sell what you can produce Limited or no choice for customer Profit from production efficiency “They can have any colour of car as long as it’s black” - Henry Ford 2007 Pearson Education Canada 10 Selling Orientation Products matched to customer needs (e.g. quality, variety, etc.) Choices more readily available Profits based on expanded sales More variety meant that companies had to “sell” their goods 2007 Pearson Education Canada 11 Marketing Orientation All activity revolves around customers and their satisfaction Extremely competitive because of wide choice of goods and services Make what you can sell, instead of selling what you can make “Have it your way” - Burger King 2007 Pearson Education Canada 12 The Marketing Concept The Marketing Orientation embodies the Marketing Concept: “The essential task of the organization is to determine the needs and wants of a target market and then to deliver a set of satisfactions in such a way that the organization’s product is perceived to be a better value than a competing product” 2007 Pearson Education Canada 13 Marketing Concept Applied Harley-Davidson – Image & reputation are legendary – Refocused on a more specific target market to fend off Japanese competitors (Honda, Suzuki, Yamaha) – Targets CEOs, lawyers, doctors, etc. – Got to know it’s core customers and changed it’s marketing & product to suit their needs 2007 Pearson Education Canada 14 Socially Responsible Marketing Orientation Fulfill society’s expectations (e.g. for a safe environment) Be a good corporate citizen Higher short-term costs accepted in return for longterm profit Both efficient production and marketing to an informed consumer in a rapidly changing environment contribute to profit. Relationship between marketer and customer crucial to profit (implement customer relationship management programs). 2007 Pearson Education Canada 15 SRM in Action Toyota : developed the first mass-produced and mass-marketed hybrid vehicle – Toyota Prius is the first hybrid vehicle that provides the comfort, features, and performance of a mid-sized sedan – Competes effectively with conventional 4cylinder mid-sized sedans (the marketing concept) – Prius sedan is in a class by itself when it comes to fuel efficiency & emissions performance 2007 Pearson Education Canada 16 Socially Responsible Marketing SRM can be divided into two main areas: 1. Programs that conserve, preserve, and protect the environment 2. Programs that support causes (a.k.a. cause marketing) 2007 Pearson Education Canada 17 Cause Marketing Allows companies to meet both social responsibility and business goals Aligning business activities with consumer cause concerns has sales potential 2007 Pearson Education Canada 18 Cause Marketing in Action KitchenAid Canada has formed a partnership with the Canadian Breast Cancer Society Encourages consumers to host cooking parties at home to raise funds Instead of bringing a hostess gift, people donate money 2007 Pearson Education Canada 19 Cause Marketing in Action Toyota has joined with Earth Day Canada Provides entry scholarships to students who have demonstrated outstanding achievement in academics and environmental community service 2007 Pearson Education Canada 20 Assignment: • • • Read p. 1-10 Complete WSH 1.1 Study for the Quiz tomorrow 2007 Pearson Education Canada 21