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Summary Understanding Marketing Principles and Developing Products
Business Essentials: Chapter 12 Full Summary
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Business Essentials: Ninth Canadian EditionChapter 12: Understanding Marketing Principles and Developing
Products
1) WHAT IS MARKETING?
- Marketing: An organization 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.
- Marketing concept: the idea that the whole firm is directed towards serving
present and potential customers at a profit.
- Value: a relative comparison of a product’s benefits versus its costs.
- Utility: the ability of a product to satisfy a human want or need.
- Consumer goods: physical products purchased by consumers for personal use.
- Industrial goods: physical products purchased by other companies to produce
other goods.
- Service: products with non-physical features, such as information, expertise, or an
activity that can be purchased.
- Relationship marketing: a marketing strategy that emphasizes building lasting
relationships with customers and suppliers.
- Customer relationship management (CRM): organized methods that a firm
uses to build better information connections with clients so that stronger company
– client relationships are developed.
- Ideas: thoughts or philosophies
Value = benefits/costs
Utility: adding value
Time utility
Place utility
Ownership (possession) utility
Form utility
The goal of relationship marketing is customer satisfaction and retention.
Political and Legal Environment:
Legislation and government programs can be favorable or not.
Marketing managers try to maintain favor by:
a. Gaining public support for products
b. Advertising for public awareness of important issues
c. Lobbying and contributing to political parties (within restrictions)
, Social and Cultural Environment:
Reflects values, beliefs, and ideas of a society
Ex. Growing popularity for organic food
Economic Environment:
Conditions affect spending patterns of businesses and individuals
a. Canadian dollar
b. Inflation/deflation
c. Interest rates
d. Business cycle
Trends affect price strategy and the growth of markets (domestic &
global)
Technological Environment:
Science and technology lead to new ways of doing everyday things.
New goods continue to emerge (like tablets and smartphones).
Trends create new goods and cause others to become obsolete.
Competitive environment:
Brand competition
a. Similar products (ex. Pepsi vs coke)
Substitute products
a. Dissimilar products that can meet the same need (ex. juice vs Pepsi)
International competition
a. Marketing domestic products against foreign products (Ford vs Honda)
2) DEVELOPING THE MARKETING PLAN
- Marketing plan: detailed strategy for focusing marketing efforts on consumers’
needs and wants.
- Marketing objectives: the things marketing intends to accomplish in its
marketing plan.
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