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Introduction
to Business MGT 211
VU
Lesson
22
MARKETING
The
American Marketing Association
defines marketing as the
process of planning
and
executing
the conception, pricing,
promotion, and distribution of
ideas, goods, and services
to
create
exchanges that satisfy
individual and organizational
objectives.
Marketing
plays an important role in
society by helping people
satisfy their needs and
wants
and
by helping organizations decide
what to produce. Value
compares a product's
benefits
with
its costs. Consumers seek
products that offer value.
Utility is the value to the
customer
that
is added by the marketer.
There are four types of
utility: time, place,
ownership, and form
utility.
The
external environment consists of
the outsides forces that
influence marketing strategy
and
decision
making. The political/legal
environment includes laws
and regulations, both
domestic
and
foreign, that may define or
constrain business activities.
The social/cultural environment
is
the
context within which
people's values, beliefs,
and ideas affect marketing
decisions. The
technological
environment includes the
technological developments that
affect existing and
new
products. The economic
environment consists of the
conditions, such as
inflation,
recession,
and interest rates, that
influence both consumer and
organizational spending
patterns.
Market
segmentation is the process of
dividing markets into
categories of customers.
Businesses
have learned that marketing
is more successful when it is
aimed toward specific
target
markets groups of consumers
with similar wants and
needs. Markets may be
segmented
by geographic, demographic,
psychographic, or product use
variables.
Market
research is the study of
what buyers need and of
the best ways to meet
those needs.
This
process entails studying the
firm's customers, evaluating
possible changes in
the
marketing
mix, and helping marketing
managers make better
decisions about
marketing
programs.
The marketing research
process involves the
selection of a research method,
the
collection
of data, the analysis of
data, and the preparation of
a report that may
include
recommendations
for action. The four
most common research methods
are observation,
surveys,
focus groups, and
experimentation.
A
number of personal and
psychological considerations, along
with various social and
cultural
influences,
affect consumer behavior.
When making buying
decisions, consumers
first
determine
or respond to a problem or need
and then collect as much
information as they
think
necessary
before making a purchase.
Post-purchase evaluations are
also important to
marketers
because they influence
future buying
patterns.
The
industrial market includes
firms that buy goods
falling into one of two
categories: Goods to
be
converted into other
products and goods that
are used up during
production. Farmers
and
manufacturers
are members of the
industrial market, Members of
the reseller market
(mostly
wholesalers)
are intermediaries who buy
and resell finished goods.
Besides governments
and
agencies
at all levels, the
government and institutional
market includes such
non-government
organizations
as hospitals, museums, and
charities.
There
are four main differences
between consumer and
organizational buying behavior.
First,
the
nature of demand is different; in
organizational markets it is often
derived (resulting
from
related
consumer demand) or inelastic
(largely unaffected by price
changes). Second,
organizational
buyers are typically
professionals, specialists, or experts.
Third, organizational
buyers
develop product specifications,
evaluate alternatives more
thoroughly, and make
more
96
Introduction
to Business MGT 211
VU
systematic
post-purchase evaluations. Finally,
they often develop enduring
buyer-seller
relationships.
1.
What Is
Marketing?
Although
you may be just beginning
your classroom study of
marketing, organizations
like
Microsoft
and Coca-Cola have been
trying to sell you things
for many years. You
have
probably
become accustomed to many
marketing techniques--contests,
advertisements,
fascinating
displays placed in strategic
locations, price markdowns
and giveaways. What
you
are about to learn is that
marketing requires a lot of
planning and implementation
to
develop
a new product, set its
price, get it to consumers,
and convince them to buy
it.
Marketing,
as defined by the American
Marketing Association, is planning and
executing the
conception,
pricing, promotion, and distribution of
ideas, goods, and services to
create
exchanges
that satisfy individual and
organizational objectives. However, in
laymen's terms,
marketing
is quite simply finding a
need and filling it.
a.
Marketing:
Providing
Value
and
Satisfaction
Marketing
plays an important role in
society by helping people
satisfy their
needs
and wants and by helping
organizations decide what to
produce.
i.
Value
compares a
product's benefits
with its
costs.
ii.
Utility
is the
value to the customer that
is added by the marketer.
In
other
words, utility is the
ability of a product to satisfy a
human want or
need.
There are four types of
utility:
Time
Utility is making
the product available when
the customer
wants
it.
Place
Utility is making
the product available where
consumers
want
it.
Ownership
Utility is the
customer value created when
someone
takes
ownership of a product. Marketers
create possession
utility
by
facilitating the
transaction.
Form
Utility refers to
the characteristics of the
product such as
its
shape, size, color,
function, and style.
b.
Marketing:
Goods, Services, and
Ideas
The
influence of marketing permeates
everyday life, applying to
goods,
services,
and ideas.
Marketing applies to tangible
and intangible goods
and
include:
Consumer
Goods--products
purchased by consumers for
personal
use.
Industrial
Goods--products
purchased by companies to produce
other
products.
Services--intangible
products, such as time,
expertise, or an activity,
that
can be purchased.
97
Introduction
to Business MGT 211
VU
Ideas--intangibles
such as, MADD, Mothers
Against Drunk
Driving.
Relationship
Marketing emphasizes
lasting relationships with
customers
and
suppliers. Purchase incentives
and customer loyalty
programs are just
some
of the ways in which firms
try to promote these
relationships.
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