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Module 1 notes

by: chloegrignon

Module 1 notes MKT 327

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notes from the first module
Introduction to Marketing
Class Notes




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This 7 page Class Notes was uploaded by chloegrignon on Monday September 19, 2016. The Class Notes belongs to MKT 327 at Michigan State University taught by carter in Fall 2016. Since its upload, it has received 21 views. For similar materials see Introduction to Marketing in Marketing at Michigan State University.


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Date Created: 09/19/16
Module 1 MKT 327 Market creation involves creating or linking to communities o Co-produce shared consciousness and culture, link community, and achieve successful commercialization o A market: a place, location, physical or virtual, selling products/ also a collection of individual with a common need and the ability/desire to satisfy o Requirement of a market to exist:  2 or more people with needs  ability to satisfy the needs  communication  exchange or transaction (universal marketing function)  Channels physical access/connection  Discover needs and wants for customer  Establish relationships of communication  Community- individuals with a common purpose, linked experiences, proximity Community centric: marketing strategy pursues an intimate relationship with its current community of customers and developing the market to tailor their needs. o Benefits:  Reduces need for marketing costs  Increases customers brand loyalty  Solidifies authenticity  Helps drive innovation  Nature of community o Market space in virtual world: interact on same website  Community marketing: o Access o Insight o Authenticity  Companies can build a community themselves or it can identify an existing community of potential customers  Factors of successful marketing and branding o Shared consciousness- common purpose of members of the community o Meaning and rituals o Moral responsibility  Role of physical connections in distribution process channels o Proficiency in functions o Accelerates specialization o Channels increase transaction efficiency o Increase assortment efficiency o Increase quality of buyers experience  A product that delivers tangible and emotional value is in essence delivering meaning  A community-centric marketing strategy is most effective when there is an economic or industry downturn  From a customer perspective, customer value is what the “get” (benefits) relative to what they have to give up (costs/sacrifices)  Customer value- fundamental basis for all marketing activity, purpose of organizations, key to successful via differential positioning, and a precursor to customer satisfaction  Firms exist to create value for others where it is neither efficient nor effective for buyers to attempt to satisfy their needs o Objective of marketing is to achieve personal, organizational, and societal objectives by creating superior customer value  Customer value has 2 definitions o Value for the customer- customer perceived value o Value for the firm- value of the customer- customer lifetime value o An interactive relativistic preference and experience  3 basic consumer needs that reflect value dimensions o functional needs  motivate the search for products that solve consumption problems o symbolic needs  desires for products that fulfill internally generated needs for self-enhancement, group membership, ego-identification o experimental needs  desires for products that provide sensory please, variety or cognitive stimulation  5 types of value that drive consumer choice o functional value  perceived utility of an alternative resulting from inherent and characteristic based ability to perform its functional purposes o social value  perceived utility of an alternative resulting from its image and symbolism with demographic, socioeconomic groups o emotional value  perceived utility as a result of comfort, security, romance, fear o conditional value  specific situation or physical or social context faced by decision maker o epistemic value  utility resulting from an alternative to arouse curiosity, provide novelty or satisfy knowledge types of value  functional/instrumental is the extent to which a product has desired characteristics, is useful, or preforms a desired function o 3M, Volvo, Nike- product innovation strategy  experiential/hedonic is the extent to which a product creates experiences, feelings, emotions to a customer o Disney, Nordstrom- customer responsiveness, good customer service- emphasis on customer relationship  symbolic/expressive is concerned with the extent to which customers attach or associate psychological meaning to a product o The Body Shop, Gap, Lexus- brand image, excel at advertising and PR, customer service and support  Superior cost/sacrifice value o Wal-Mart, Dell, Amazon- compete on price and convenience typically focus on effectiveness goals, top down emphasis on SOP and excel at manufacturing  Manufacturing companies create value by acquiring raw materials and using them to produce something useful  Value that’s created and captured by a company is the profit margin o Value created-cost of value=margin  A value chain is a set of activities that an organization carries out to create value for its customers  Porter’s value chain o Focuses on systems and how inputs are changed into the outputs purchased by consumers o Primary activities relate directly to the physical creation, sale, maintenance and support of a product or service  Inbound logistics- process of receiving, storing, distributing inputs internally- supplier relationships are key factor in creating value here  Operations- transformation activities that change inputs into outputs that are sold to customers  Outbound logistics- deliver your product or service to your customer- collection, storage, distribution systems  Marketing and sales- process used to persuade client to purchase from you instead of competitors  Service- activities related to maintaining the value of your product or service to your customers once it’s purchased o Procurement (purchasing) – This is what the organization does to get the resources it needs to operate. This includes finding vendors and negotiating best prices. o Human resource management – This is how well a company recruits, hires, trains, motivates, rewards, and retains its workers. People are a significant source of value, so businesses can create a clear advantage with good HR practices. o Technological development – These activities relate to managing and processing information, as well as protecting a company's knowledge base. Minimizing information technology costs, staying current with technological advances, and maintaining technical excellence are sources of value creation. o Infrastructure – These are a company's support systems, and the functions that allow it to maintain daily operations. Accounting, legal, administrative, and general management are examples of necessary infrastructure that businesses can use to their advantage. o Companies use these primary and support activities as "building blocks" to create a valuable product or service.  Using Porter's Value Chain o To identify and understand your company's value chain, follow these steps. Step 1 – Identify sub activities for each primary activity- 3 of them: 1.Direct activities create value by themselves. For example, in a book publisher's marketing and sales activity, direct subactivities include making sales calls to bookstores, advertising, and selling online. 2.Indirect activities allow direct activities to run smoothly. For the book publisher's sales and marketing activity, indirect sub activities include managing the sales force and keeping customer records. 3.Quality assurance activities ensure that direct and indirect activities meet the necessary standards. For the book publisher's sales and marketing activity, this might include proofreading and editing advertisements. Step 2- identify sub activities for each support activity Step 3- identify links- key to increasing competitive advantage (ex- link between developing the sales force and the sales volumes) Step 4- look for opportunities to increase value


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