Understanding Canadian Business
Nickels*McHugh*McHugh*Berman*Cossa
Chapter 15
Marketing

---

• Chapter 15 - Marketing:  Building Customer and Stakeholder Relationships - (pages 450-481)
  • Marketing = the process of determining customer needs and wants
    and then providing customers with goods and services that meet or exceed their expectations.
  • Marketing's goal
    • Find a need
      and fill it.

• Market = a group of people who have
  1. unsatisfied wants and needs
  2. the resources to buy products
  3. the willingness to buy products
  4. the authority to buy products
• Marketing History
  1. Production Era (before 1900)
     • Produce as much as possible
     • Demand exceeded Supply
  2. Sales Era (early 1900s)
     • Capacity/Supply often exceeded Demand
     • Sales Orientation to stimulate Demand
       • selling, advertising, publicity, sales promotion techniques
  3. Marketing Concept Era (after WW2, 1945)
     • Begin with the marketing process, then produce the product
     • Marketing Concept
       1. customer orientation
          • find out what consumers want (internal customers, external customers - p.473)
          • provide what consumers want
       2. service orientation
          • customer satisfaction
       3. profit orientation
          • profit allows the firm to survive, to expand, to serve more customers
  4. Market Orientation Era (1990s- )
     • CRM = Customer Relationship Management
       • = learning as much as possible about customers and doing everything you can to satisfy them or even delight them with goods and services over time.
       • Building long-term profitable relationships with customers
       • Establishing & Maintaining current customers vs. finding new customers
         • Discouraging some unprofitable customers
       • CRM = Relationship Marketing = keeping old customers rather than creating new ones
         • learn current customers' wants and needs and develop products/services for them
         • Community bonding = loyalty, commitment
           • interactive Websites/chats/forums, online sales, newsletters, meetings, rallies, events, etc...
       • 80/20 Rule - 80% of your business comes from just 20% of your customers
       • Consider Consumer Decision-Making Process = Consumer Behaviour (see below)
       • opposite of "transactional marketing" = make the transaction and that's it, that's all there is
     • Continuous SWOT analysis by market-oriented firms (see below)
• The Marketing Process
  1. Find a need
  2. Conduct research
  3. Design a product to meet the need based on the research (P = product)
  4. Conduct product testing = concept testing (P = product)
  • test marketing of prototypes
  • outsourcing for production
  5. Determine a brand name and design a package (P = product)
  • product development process = packaging, branding, pricing (see chapter 16)
  6. Set an appropriate price (P = price)
  • considering costs (production, distribution, promotion)
  7. Select a distribution system (P = place)
  • direct sales
  • intermediaries = middlemen (see chapter 17)
  8. Design a promotional program (P = promotion)
  • motivate people to buy products
  • advertising, personal selling, public relations, publicity, word-of-mouth, sales promotions (see chapter 17)
  9. Build a relationship with customers (CRM)
     • customer feedback
     • postpurchase service = after-sale service
     • environmental concerns
• Marketing Management = the process of planning and executing the 4 Ps in the Marketing Mix
  • Marketing Mix
    1. Product = conception = design a product that people want (chapter 16)
    2. Price = price the product competitively (chapter 16)
    3. Place = distribution = place the product in a location where consumers can find it easily. (Chapter 17)
    4. Promotion = promote the product so that customers know it exists (chapter 17)
• Marketing Research
1. Define the problem (challenge) or opportunity
• the past and how the situation has changed
• determine the present situation
• the likely future, business trends, ecological impact
• the alternatives
• what information is needed
• how to get the information and how to analyze the data
2. Collect data = find the information
• estimate of costs
• secondary data = existing data = data that have already been compiled by others (see page 459)
  • internal (within the organization), press, publications, libraries, Internet, etc.
• primary data = new information = doing your own data collection (see page 459)
  • Observation, Survey/questionnaire, Personal interview, Focus group
3. Analyze the research data
• convert data into information
4. Choose the best solution
   1. determine alternative strategies
   2. determine why one strategy may be the best solution (customer-driven, easiest, profitable, right (ethics), etc.)
      1. CI = Continuous Improvement = keeping current customer information (see page 275)
   3. implement the chosen solution
   4. review the results of the solution
   5. take corrective action
   6. do further studies
• Market-oriented firm
  1. Continuous SWOT analysis (SWOT = TOWS)
  2. sharing this information across departments
  3. using this information to create "customer value"
  • Marketing Environment
    • Environmental Scanning = the process of identifying the factors that can affect marketing success
      1. Global factors
         • technological change (e.g. the Internet) = elimination of borders
      2. Technological factors
         • change (e.g. Internet, consumer databases)
         • match customer needs, customize goods and services, flexible manufacturing, mass customization
      3. Social factors
         • demographic changes, trends (e.g. population growth and shifts)
      4. Competitive factors
         • environment (e.g. the Internet)
         • price, service, availability, value
      5. Economic factors
         • economic environment = upturns/prosperity, downturns/recessions, unemployment, disposable income
  • Markets
    1. B2C Market = Business-to-Consumer market  (see page 472 for B2C-B2B comparison)
       • end use of the product = ultimate consumer purchases from intermediaries (wholesalers, retailers)
       • Market Segmentation = the process of dividing the total market into several groups whose members have similar characteristics.
         • Levels of Market Segmentation
           1. Mass Marketing = developing products and promotions to please large groups of people
              • product orientation
              • simplest method of market segmentation = all consumers fit into a single market
           2. Target Marketing = a consumer profile (that is sizable, reachable, profitable)
              • customer orientation
                1. Niche Marketing
                2. One-to-one Marketing = Individual Marketing
                3. CRM (see above)
              • Segments = Categories = Divisions = separate groups of customers (see page 469)
                1. Geographic segmentation (e.g. city, province, country)
                2. Demographic segmentation (e.g. age, income, education level)
                3. Psychographic segmentation (e.g. values attitudes, interests, personality, lifestyle)
                4. Behavioural segmentation (e.g. product benefits preferences, usage rate, user status, user level of loyalty)
                   • Behaviour with or toward a product.
    2. B2B Market = Business-to-Business market = Industrial market  (see page 472 for B2C-B2B comparison)
       • Includes
         • manufacturers
         • intermediaries (e.g. retailers)
         • institutions (e.g. hospitals, schools, charities)
         • governments
       • few customers, large customers, geographically concentrated, large purchases, rational, direct (i.e. not to end-users), personal selling
  • Stakeholder Marketing
    • Establishing and maintaining mutually beneficial exchange relationships over time with all the stakeholders of the organization.
    • Employees, customers, suppliers, dealers, shareholders, media, community, environment (green products)
  • Consumer Behaviour = Consumer Decision-Making Process
    • Part of CRM (see above)
    • Part of Marketing Research (see above)
    • Steps in Consumer Decision-Making Process
      1. Problem recognition
      2. Information search (ads, brochures, press, publications, advice, etc.)
      3. Evaluate alternatives
      4. Make purchasing decision
      5. Evaluate level of satisfaction with purchase
         • Cognitive dissonance = Consumers need reassurance after the purchase. (Long-term relationship objective) (CRM - see above)
    • Influencing variables (marketing mix, psychological, situational, sociocultural)
    • Other factors (values, attitudes, behaviour) - Learning (experience), Cultural, Subculture

  • ---

    • Summary
      • Marketing trends
        • increasing customer-orientation
          • satisfy customers
          • please or delight customers
        • involving the entire channel (suppliers, dealers, etc.) to provide service to customers
        • focusing on current customers (instead of focusing on finding new customers)
      • Marketing concept
      • The 4 Ps
      • Marketing Research process
      • Market Segmentation
      • B2C market vs. B2B market
      • Marketing Strategies
        • Stakeholder Marketing
        • CRM
      • Targeting
      • Relationship building = Relationship marketing
  • Resources
    • Chapter 15 - Understanding Canadian Business
    • Understanding Canadian Business