BMI 3C1 – Unit 1 Notes
Marketing – Customer Value, Satisfaction, and Customer
Relationships
What is Marketing?
 Selling? Advertising?....typical answers! But marketing is
NOT advertising!
 Marketing is an organizational function and set of
processes for creating, communicating, and delivering
value to customers and for managing customer
relationships.
In order to create “value”, marketing seeks to discover the
needs and wants of prospective customers
&
To satisfy them..
Requirements:
1)Two or more parties (ie, a bookstore and someone wanting
to buy a magazine)
2)Desire and ability to satisfy these needs (copies of the
magazine you would like to buy, and you having the money
to purchase the magazine, AND the time to go to the
bookstore)
3)A way for the parties to communicate (you know that the
product exists – you saw it on display)
4)Something to exchange (Marketing occurs when the
transaction takes place between the buyer and the seller)
Marketing, today, affects EVERY
person and organization!
A market..
Is people with the desire and ability to buy a specific product
Who markets?...
Every organization!!
Manufacturing: McCain foods, GM
Retailing: The Bay, Canadian Tire
Services: CBC, Air Canada
...and more!
Other areas..
 Nonprofit organizations: Canadian Red Cross, Toronto
MetroZoo
 Colleges and universities: to attract students, faculty,
and donations.
 Places (cities, provinces): to attract tourists,
conventions, and businesses
 Individuals: ie, for voting
What is Marketed?
Goods – physical objects
Services – activities or deeds,
 Ie, Crest toothpaste
 Ie, airline trips
 Financial advice from
 Nikon cameras
TDWaterhouse
 Long distance telephone calls
 Apple Computers
Discovering Consumer Needs & Wants
Sounds easy?? But it is not!
FACT: New Product
development experts
estimate that 80 to 94% of
the over 25000 new
consumable proudcts
(food, beverage, healthy,
beauty, pet products)
introduced in North
America annually do NOT
succeed in the long run!
Taken from(Robert
M.McMath and Thom
Forbes, What Were They
Thinking? (New York:
Times Business, 1998) pp.
3-22
 Case example...
Kimberly Clark’s Avert
Virucidal Tissues
First! The name confused consumers
(what is virucidal?) It contains
vitamin C derivatives that were
supposed to keep germs from
spreading.
Second! According to McMath,
names with –cidal do not put
people in a buying mood!
Consumer needs & wants
 A need occurs when a person feels physiologically
deprived of basic necessities such as food, clothing,
and shelter.
 A want is a felt need that is shaped by a person’s
knowledge, culture and personality.
Marketing tries to influence what we buy!
Target Market
One or more specific groups of potential consumers toward
which an organization directs its marketing program
The organization’s marketing department must take action
and develop a complete marketing program that creates,
communicates and delivers value to a target market.
Homework: Read pages 2-3 (Jones Soda) Q.1 & 2
Read pages 3-7 Do: P. 8 ICE: 1a, 2a, 3a
Read pages 8-13
Review (from yesterday)
 _______is the sum of all the activities involved in the
planning, pricing, promoting, distributing, and selling
of goods and services to satisfy consumers' needs and
wants.
ANSWER: Marketing
 Industrial goods (also called _________ goods) are
products used in business to make other products or to
assist in business operations.
Answer: Business
Review con’t
 Mining companies, logging corporations, farms,
fishing boats, and oil rigs all market __________.
ANSWER: raw materials
 This alters the nature of the product. Converting trees
into wood pulp, pressing apples into juice,
pasteurizing and homogenizing milk: all are examples
of ________.
ANSWER: processing
 ________ goods in the industrial market are products
that no longer require processing and are used to make
another product or provide a service. An automobile
manufacturer requires spark plugs and fan belts, tires
and integrated circuit boards.
Answer:Finished
 ________ goods are nonindustrial products intended
for personal use by the general public. (Retail stores
sell this).
 Answer:Consumer
New Unit 1 notes…
 Brand management is the most common method of
organizing marketing activities, especially for
companies that sell a wide variety of products. Procter
and Gamble (Tide, Pringles, Crest, Pampers, etc.),
Kellogg's (Corn Flakes, Rice Krispies, Frosted Flakes,
Vector, etc.), and Campbell's (Campbell's soups,
Pepperidge Farm, VB, Prego Spaghetti Sauce, etc.) are
examples of companies that have diverse products and
markets.
 Consumers now realize their power in the marketplace
and demand safer cars and healthier cereal…
 The Internet has connected buyers with sellers
directly and globally.
Assignment:
 Select an article from a Canadian newspaper that
relates to marketing activities (ie, a new company, a
new product, etc.) Summarize the main ideas in the
article and make an oral presentation to the class.
Companies to be approved by teacher
 Duration: 1-2 minutes.
 A bristol board that visually represents your new
product/company (please use subtitles)
 Presentations begin:
Chapter 2
 Product Life Cycle
Introduction stage:Product launch
 The moment when a new product is introduced into
the marketplace
 Usually very expensive because of technology,
advertising, first into the market
By Mitsubishi
Introduced into
Canada in 2012
Growth stage
 Once early adopters buy the product and it is visible, other
consumers are likely to follow
 Product’s reputation is spread by word of mouth and
advertising
 The faster a company can reach the growth stage, the faster
they can make a profit
 The primary objective becomes one of stimulating
"selective demand." This is an attempt to stimulate
demand for a specific brand -- the advertiser’s brand -instead of the entire product category.
 Ie Organic grocery stores; gluten free products,
cupcake stores, yogurt shops, and ?
 Market share: A company’s sales of goods and services
as a percentage of the total sales of that market.
Maturity stage
 ..the period during which the sales
increase more slowly.
Decline
 Company may change packaging, etc., or remove the
product from the market altogether
Duracell, when it included a battery tester as part of the
package, provides an excellent example of how a
significant package modification can revitalize a
brand's sales
:
Decision Point
Rather than focus on enhancing or adding to the physical characteristics of the
product, we can
Modify the product's packaging to make it seem almost
like a new product;
Make changes in the way the product looks -- make style
improvements.
Functional Changes to the Product
•Products can be changed by improving their basic functionality.
•Usually such changes result in a "new and improved" version of the product in
which enhancements are made to the product's existing characteristics.
•The product delivers the same benefits it always has delivered -- it just does a
better job! Procter & Gamble frequently promotes "new and improved" versions
of many of its brands.
•For example, Crest continuously modifies its product . Changes are made to its
formula to improve its basic cavity-fighting properties. These improvements are
often referred to as simple quality improvements. They do not add any new
benefits; they simply change the formula so it can do a better job.
•Procter & Gamble has done the same thing over the years with Pampers and
LUVs. Recently, LUVs has promoted a more absorbent version of its brand.
Neither of these does anything new, they just work a little bit better!
Add New Products to Same
Product Line…
 An additional strategy for extending growth and
maturity is to add new products within the same
product line. These new products can carry the same
brand name as their parent brands, or can be given
different names. If the new product is labeled with the
same brand name, it is called a 'line extension.’
 M&M recently introduced a new line extension, under
its M&M brand -- Crispy M&Ms.
 Frito-Lay continually seeks new flavors to keep its
Dorito's line healthy.
Niche market
 Small section of the market that they dominate
 ie, Pet Hotel
 Ie., Red Lobster
Consumer Motivation
Maslow’s Hierarchy of Needs