Marketing Class Notes

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and positioning are arguably the most important concepts in marketing, but many business organizations have difficulty identifying and selecting target market segments and/or developing unique positioning strategies.

Marketing Concept

Successful organizations practice the marketing concept by matching their capabilities with their customer/consumer needs and wants. By identifying and meeting customer/consumer needs and wants, providing products to satisfy those needs and wants, the organization ensures its long-term success and profitability.

This matching process takes place in what is called the marketing environment. An organization that adopts the marketing concept accepts the needs of its customers and potential customers as the basis for its operations.

Organizations face threats from competitors, and changes in the political, economic, social, and technological environment, all of which we will learn about later in this module. All these factors have to be taken into account as a business tries to match its capabilities with the needs and wants of its target customers.

A need is a basic requirement you have to have, cannot do without, and must satisfy to survive. These needs are extensive and can relate to physical functions (such as food and shelter) or to psychological ones (such as affection, esteem, self-improvement, social acceptance).

On the other hand, a want is something non-essential, something you would like to have. It is not necessary to your survival, but it would be a nice to have. These wants can be infinite and are typically shaped by social and cultural forces, the media, and marketing activities of organizations.

Need is something you must have to survive.

Want is something you do not need to survive.

Keep in mind that some products can be both needs and wants. For instance, food could be a need or a want, depending on the type of food. What other products can you think of that can be a need and a want?

New-era Marketing

An organization’s orientation—its focus on products, sales, customers, competitors, and/or the entire market—and the subsequent priorities, treatment of customers, and resource allocation are important questions that organizations competing in global markets must address. You will learn why many organizations are choosing to adopt new-era philosophies to create a sustainable marketing strategy. Again, the whole emphasis is on a commitment to value, building long-term relationships with customers, and adopting a social cultural marketing concept.

New-era orientation is about creating competitive advantage by making informed decisions, using ethical and socially responsible business practices, and producing quality, valued products that are socially and environmentally responsible. New-era marketing is particularly relevant as organizations and societies struggle with significant issues which impact business practices. Some of these issues include innovations such as genetically modified foods, the depletion of natural resources, and air and water quality.

There is significant anti-business, anti-trade sentiment in Canada, where corporations—particularly multinational corporations—are depicted as being evil empires determined to subjugate democratic principles and social well-being. Certainly, there are some high-profile examples of unethical business practices (e.g., Monsanto Corporation, Halliburton, to name a few), but many leading marketing organizations realize that new-era orientations are beneficial to their quest to create value, to compete, and to achieve their objectives.

Have you considered why an organization that follows a new-era orientation might have a competitive advantage (the ability to compete more effectively) over organizations that do not?

New-era organizations like TOMS Shoes or Burt’s Bees focus on providing quality products, being responsive to customers, and creating value for all stakeholders, while being socially responsible. This gives them a competitive advantage in attracting customers and other stakeholders (employees, suppliers, distributors, partners, members, etc.) to their organization.

Marketing Value

Value creation is at the heart of marketing. By value we mean what the consumer obtains from buying and using a product (benefits) relative to what they have to give up doing so (costs and sacrifices). Marketers create value, actual and perceived, for their stakeholders to achieve the organization’s objectives, both financial and marketing.

Stakeholders are internal or external to the organization. Those internal to the organization include employees, owners, etc., while those external to the organization include customers, suppliers, financial institutions, shareholders, etc.

Marketers create different types of value to ensure the right value exchange takes place and that both parties to the transaction are satisfied though the organization’s marketing mix:

• Products produce value through their features, attributes, and/or benefits (FABs)

• Price is the buyer’s and seller’s assessment of the value of the product and reflects the actual and

perceived quality of the product.

• Place determines how easily customers can find the product.

• Promotion provides information, creates awareness, and adds value through incentives to the

product.

The different types of value marketers create as a product makes its way through the value chain from manufacturer to the consumer include the following:

1. Functional-Instrumental value is about products being useful: having the right features, attributes, or characteristics (such as Rubbermaid making storage containers that are the right size); resulting in desired performance (such as fuel-efficient cars, or fast computers); or resulting in desired outcomes (for example, you do not really care how Aspirin works; you just care whether your headache goes away).

2. Experiential-Hedonic value is about creating appropriate experiences. For example, restaurants create sensory experiences; vacation resorts and movie companies create emotional experiences (fun, pleasure, excitement); board game companies like Trivial Pursuit create social-relational experiences; and entertainment companies like Disney create experiences relating to novelty, fantasy, and knowledge.

3. Symbolic-Expressive value is about creating