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Tales Of Marketing Essay, Research Paper

MARKETING

CHAPTER 1

Field Of Marketing

INFORMATION TECHNOLOGY

-New marketing based on info technology. EX. Royal Bank

-Royal spent $15 million on data base technology to serve customers more uniquely.

-Increased response rate from 4% to 60%.

NATURE AND SCOPE OF MARKETING

EXCHANGE AS THE FOCUS

-Marketing occurs any time 1 social unit (person or organization) exchanges something of

value with another social unit.

-Marketing consists of activities designed to generate & facilitate exchanges intended to satisfy

human needs or wants

Exchange-is one of 3 ways in which a person can satisfy a want.

EX. Clothes make, borrow, use some form of coercion to get them

or offer something of value to another who will voluntarily exchange

-Only last approach they call exchange in the sense that marketing is taking place.

Following must exist for marketing exchange to take place.

-2 or more social units must be involved & each must have wants to be satisfied. If you are self sufficient

there is no need for exchange.

-Parties must be involved voluntarily (Although argued monopolies deter this.)

-Each party must have something of value to contribute & each must believe that it will benefit

-Parties must communicate even if done through 3rd party. Without communication, no trade.

Marketers-take initiative in trying to stimulate & facilitate exchanges.

-They develop marketing plans & programs & implement them to create exchange that can be repeated

over time.

Market-on other side of exchange, made up of social units to whom marketing programs are directed & who will play a key role in acceptance or rejection of marketers offer. Markets made of customers

Customers-Any person or group with whom an individual or organizational marketer has an existing or potential exchange relationship.

People who constitute a market play a number of roles.

A. Decision maker, individual or organizational unit that has the authority to commit to an exchange

B. Consumer, who actually uses or consumes the product.

C. Purchaser, The party who actually carries out the exchange

D. Influencers, who affect decisions of others because of their expertise, position, or power.

Worth Baseball, new safer ball, but clashes with tradition

Needs-viewed in strict physiological sense (food, clothing, shelter) everything else is a want.

Product-the objective of the exchange or what is being marketed generically as the product.

-It can be a tangible, physical product, a service, an idea, a person, or a place.

tangible, physical product-corn flakes

a service-accounting advise

an idea-advertising slogan

person-individual applying for a marketing position

A place-provincial gov’t trying to attract tourism is an example of marketing a place as the product.

THE CONCEPT OF RELATIONSHIP IN EXCHANGE

Relationship-can develop when 2 people or organizations are voluntarily involved in an exchange situation, are communicating with each other, & are contributing something of value to the exchange & thereby mutually satisfy needs or wants.

-relationships are of more long-term nature & involve many exchanges & interactions over a # of years.

-longer relationship lasts, more likely it will be of special value to those taking part in it. Better you

understand each other, the better the needs are satisfied.

APPLICATIONS OF MARKETING

Books definition of marketing:

Marketing is a total system of business activity designed to plan, price, promote & distribute want-satisfying products, services, & ideas to target markets in order to achieve the objectives of both the consumer & the organization.

Marketing is

A total system designed to: for business activities plan, price, promote & distribute

Something of value: want-satisfying products, services, & ideas in the context

of a valuable relationship.

For the benefit of: the target mkt. -

Present & potential household consumers or business users.

To achieve the: satisfaction of the needs & objectives of both the consumers & the firm

Definition has implications when marketing is properly applied:

-It’s a systems definition, meaning it should be understood & applied by all in firm.

-Entire system of business or organizational activities must be customer orientated & focus on quality of

the customer relationship- customers needs & wants must be recognized & satisfied effectively.

-Marketing program starts with an idea for a product or service & doesn’t end until the customer’s

are completely satisfied, which may be some time after the exchange.

wants-Marketing program, generally termed the marketing mix, usually consists of 4

coordinated elements:

A. a product or service assortment

B. a pricing structure

C. distributions systems & channels

D. promotional activities

-Marketing mix doesn’t guarantee customer satisfaction.

EVOLUTION OF MARKETING

-Foundations in Canada were laid by French & English settlers in pioneer times

-Developed marketing relationships also with various Native groups.

-Since then marketing has evolved through 3 successive stages of development:

-production orientation, sales orientation & marketing orientation.

-Following from last stage, marketing now more focused on processes involved in providing service &

developing marketing relationships.

-All firms today are at different stages of marketing.

PRODUCTION ORIENTATION STAGE

-firms in this stage, typically manufacturers, focused on increasing output while assuming that customers

would seek out & buy reasonably priced & well made products.

-Executives in production & engineering shaped firm’s planning.

-finding customers was viewed as a relatively minor function, term marketing not yet used. (stage

dominant until early 1930’s.) Some mining firms still here.

SALES ORIENTATION STAGE

-After great depression it was clear that main problem in economy no longer was to produce, but how to

sell the output.

-Making best product didn’t assure success. Realized you needed promotional effort.

-began sales orientation stage-when selling activities and sales executives gained new respect &

responsible from company management.

-stage common until 1950’s, when marketing era began to emerge.

MARKETING ORIENTATION STAGE

-as a result of WWII there was enormous pent up demand for consumer goods.

-postwar spending slowed down as supply caught up with demand, & firms had to find way to sell excess

capacity, this began sales orientation era.

-consumers got smarter bringing forth greater variety of goods.

-In marketing orientation stage companies identify what consumers want & tailor all the activities of the

firm to satisfy those needs as efficiently as possible.

-in this stage firms are marketing rather than merely selling.

**********SEE TABLE 1-1 (What Business You in?) page 8

DIFFERENCES BETWEEN MARKETING & SELLING ORIENTATIONS

-term marketing & selling are often used interchangeably, but really are vastly different.

-Basic difference is that selling is orientated to what is available & to the organizations needs, while

marketing is orientated to the customers needs & how a product & service mix can satisfy them.

SERVICES

-experienced shift from goods production to service production over last 20 years.

-resulting in meeting of needs of consumers through providing efficient, effective, & high quality service.

-can think of services as falling into 2 different categories:

1) non-tangible product to be sold, such as cleaning service

2) service accompanying the sale of most tangible products, such as delivery of stove.

-useful to distinguish between core elements & noncore features.

Ex. Core product; traveler checking into hotel is purchasing a room for the night.

Once checked in customer will expect all sorts of services like cleaning, AIR C, nice employees etc.

FACTORS THAT DRIVE CUSTOMER SATISFACTION FIG 1-2

AFFECTIVE DIMENSIONS OF THE INTERACTION

INTERACTION WITH THE FIRM & ITS EMPLOYEES

TECHNICAL PERFORMANCE

PROCESSES & SUPPORT

CORE

-Above example includes 5 levels of customer satisfaction, called drivers of customer satisfaction.

Core-is the basic product or service provided by the firm. Can be service or product.

Process & support-(2nd level) for hotel includes such things as reservation services,

Billing systems, convenience of hotel location & room service menu.

Technical performance-(3rd level) which determines whether the service provider gets the core product & support services right.

-emphasis is on meeting the expectations of the customer.

Interaction with the firm & its employees-(4rth level) can involve both face to face interaction & the interaction based through other technology.

Affective dimensions of the interaction-consider subtle messages that firms send to customers as sometimes dissatisfaction has little to do with the service or quality of product. Create positive or negative feelings toward the company.

RELATIONSHIP MARKETING

-concept that embodies building personal, long-term bonds with customers.

-Emphasis on relationship marketing is a further step in the development of the market orientation.

-While many factors affect the development of a strong relationship marketing program, 2 major factors

are (1) the provisions of quality products & services and (2) the conducting of marketing relationships

within a trusting & ethical framework.

THE MARKETING CONCEPT

Marketing concept-philosophy emphasizing customer orientation & the coordination of marketing activities to achieve the mutual long-term objectives of both the customer & the organization.

NATURE & RATIONALE (SEE FIG 1-3)

-all planning & operations should be customer orientated

-every dept. & employee should be focused on contributing to the satisfaction of customers needs.

-All marketing activities in an organization should be co-ordinated marketing efforts

(product & service planning, pricing, distribution, promotion, & customer service)

should be designed & combined in a coherent, consistent way, & one executive should have overall

authority & responsibility for the complete set of marketing activities.

-customer-orientated, co-ordinated marketing is essential to achieve the organization’s

performance objectives while at the same time meeting the customer’s needs.

NEW FOCAL POINTS IN THE MARKETING CONCEPT

THE SOCIETAL MARKETING CONCEPT

-social responsibility can be quite compatible with the marketing concept.

-compatibility depends on 2 things: how broadly a firm perceives its marketing goals & how long it’s

willing to wait to achieve those goals.

-firm that sufficiently extends the breadth & time dimensions of its marketing goals to fulfill its social

responsibility is practicing the societal marketing concept.

-Company shouldn’t just recognize only the buyers buy also those affected by its operations.

-Firm should look at long-term view of customer satisfaction & performance objectives.

A. satisfy the wants of its product buying customers

B. meet the societal needs of others affected by the firms activities

C. achieve the company’s performance objectives.

TRUST, ETHICS, & MARKETING RELATIONSHIPS

tools marketers use to deliver to customers include the design of product or service, the price at which it is offered, the message used to describe it, the channel through which it is made available, & the level of service provided to customers.

WHAT IS ETHICAL BEHAVIOUR? (See table 1-2 on page 13)

Ethics-are the rules we play by, the standards of behaviour generally accepted by a society.

INSTILLING AN ETHICAL ORIENTATION

-Create ethical environment by holding ethical workshops & setting up committees

-make sure that performance demands on employees are reasonable.

THE BENEFITS OF ETHICAL BEHAVIOUR: CONSUMER TRUST

-successful firms are built with successful relationships with suppliers, customers,

& employees. Unethical behaviour undermines trust.

QUALITY AND THE MARKETING RELATIONSHIP

WHAT IS QUAQLITY?

One definition of quality is the absense of variation in products& services.

-should have variance control to better serve customers.

-quality control misleading because its limited to inspecting.

-real indication of quality is how well a product meets both the product & service expectations of the

consumer, not of the production department.

Total quality management-delegating quality control to more than 1 department to meet the expectations of the customer.

Goals

1) better, more appealing, & less variable product & service quality.

2) Quicker & less variable responses from design all the way to delivery.

3) Greater flexibility in responding to customers needs.

4) Lower costs as result of quality improvements.

Marketers must do 2 things;

A. ensure that all marketing activities contribute to creating reasonable customer

expectations.

2. eliminate variations in customers experience.

INSTILLING QUALITY

-study others to identify high standards of performance in such areas as delivery delays,

Eliminating defects, & training. Process called benchmarking.

-Must try to improve customer contact performance.

-All members of company should constsntly try to improve the business.

-Form partnerships sp you can ideas from them for improvements.

-Measuring product & service quality & the resulting customer satisfaction.

IMPORTANCE OF MARKETING

IN THE GLOBAL ECONOMY

-Not facing competition from just Japan, Europe & U.S. anymore more global economy

-reduction in trade barriers worldwide. More opportunity but also more competition.

IN THE CANADIAN SYSTEM

-now have growing mass customization.



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